LG Innotek (KOSPI: 011070) has signed a 600 billion KRW (approximately $410 million) investment agreement with the Gyeongsangbuk-do provincial government and Gumi City on March 25. The investment aims to expand its high-value semiconductor substrate business, including FC-BGA. This follows the company's previous 1.4 trillion KRW investment in 2022.

LG Innotek has already secured customer orders for its FC-BGA products and anticipates continued demand growth, prompting its expansion efforts. Industry sources indicate that Intel is a key customer for LG Innotek's FC-BGA products. The newly announced investment will primarily fund the expansion of FC-BGA production lines, as well as the construction of a high-value camera module manufacturing facility. The investment period begins in April 2024 and is expected to be completed by December 2026, spanning approximately two years and eight months.

In 2022, LG Innotek acquired LG Electronics' former Gumi Plant 4 (covering 230,000㎡) for 1.4 trillion KRW to strengthen its FC-BGA and smartphone camera module businesses. The company is actively upgrading the Gumi plant into a smart factory by integrating AI, deep learning, robotics, and digital twin technologies. With this latest investment, LG Innotek's total investment in FC-BGA and camera module businesses since 2022 has reached 2 trillion KRW.

In the FC-BGA sector, LG Innotek aims to accelerate development and establish it as a core business worth several trillion KRW. CEO Moon Hyuk-soo stated after the company's shareholder meeting on March 24: "Since December 2023, we have been supplying PC-use FC-BGA products to major global tech companies. We are currently working on certifications for server-use FC-BGA with additional clients, and we expect to secure one to two certifications this year. Given our substantial investment, we anticipate reaching break-even by 2026." Starting in 2025, LG Innotek plans to expand its FC-BGA customer base while advancing next-generation substrate technologies such as glass substrates.

For the camera module business, LG Innotek is optimizing its production structure. Traditional models will be manufactured at its Vietnam plant, while new high-value models will be produced at the Gumi plant. Camera modules remain LG Innotek's core business, accounting for over half of its total sales, with Apple's iPhone as a major customer. Facing price competition from Chinese rivals, the company is strategically shifting cost-sensitive products to Vietnam while leveraging its upgraded Gumi facility to strengthen its position in Apple's supply chain.