LG Innotek Takes a Major Step in Semiconductor Substrate Production

LG Innotek has officially begun mass production of flip-chip ball grid array (FC-BGA) semiconductor substrates, marking a significant milestone in its advanced substrate business. The company's CEO, Moon Hyuk-soo, revealed the news during his visit to CES 2025 in Las Vegas on January 8, underscoring the company's commitment to stabilizing production yields despite ongoing industry challenges.

FC-BGA is an advanced, high-performance alternative to traditional printed circuit boards (PCBs) that connects semiconductor chips to the mainboard. Its superior signal transmission and heat management capabilities make it essential for high-end systems-on-chips (SoCs), commonly used in processors, GPUs, and AI accelerators. The demand for FC-BGA substrates is expected to grow dramatically, particularly with the rise of AI applications. The market size is projected to double from $8 billion in 2022 to $16.4 billion by 2030, according to Fujikamera General Research Institute.

Expanding Partnerships and Global Growth Plans

LG Innotek entered the FC-BGA market in 2022, initially producing substrates for network and modem applications. The company has since expanded its customer base to major North American semiconductor companies, including Intel and Qualcomm. Production at its Gumi Plant 4 began in December 2024, and CEO Moon hinted at further expansion, stating, "We aim to secure additional clients and begin full-scale production for other major tech companies by next year."

Industry Rivalries and Market Outlook

In a competitive industry, LG Innotek's entry into the FC-BGA market faces rivals such as Samsung Electro-Mechanics, which has already secured significant contracts with AMD. While LG Innotek's early revenues from FC-BGA are modest, analysts expect the company to ramp up production for high-end markets, including servers and PCs, to reach its goal of 500 billion won in annual revenue by 2025 and 1 trillion won by 2030.

A Diverse Strategy for Future Growth

In addition to its semiconductor business, LG Innotek is shifting some of its production to Vietnam to optimize costs in response to growing competition in the global camera module market. The company is also exploring new opportunities in humanoid robotics, partnering with several AI robotics firms highlighted at CES 2025.

With its growing investments in advanced semiconductor substrates and a diversified product strategy, LG Innotek is positioning itself as a key player in the rapidly evolving semiconductor and AI markets.