Samsung Electro-Mechanics (Semco) has officially completed the liquidation of its Kunshan factory in China, marking a significant shift in its global business strategy. The plant, which had been in operation for 15 years, officially closed at the end of 2024, ending Semco's involvement in the smartphone high-density interconnect (HDI) motherboard market. This move is part of the company's broader plan to pivot toward higher-value business areas, including advanced semiconductor substrates and automotive electronics.

The Kunshan facility, established in 2009, was originally set up to produce HDI boards for smartphones, capitalizing on the booming mobile market. However, with increasing competition from low-cost manufacturers and pressure from market saturation, the profitability of the HDI business began to decline. In December 2019, Semco announced its decision to gradually exit the sector, and the liquidation process, which started at the end of 2019, has now been completed.

The closure of the Kunshan plant follows the earlier liquidation of Samsung Electro-Mechanics' Dongguan factory, which wrapped up operations at the end of 2023. Dongguan, the first Samsung Group operation in China, had produced various electronics, including speakers and keyboards. With both factories now shut down, Semco's remaining operations in China are limited to high-tech zones in Tianjin and Goshin.

Tianjin continues to be a key site for Semco's production of Multilayer Ceramic Capacitors (MLCCs), a crucial component in Samsung's high-tech products. Chairman Jae-Yong Lee has personally visited the Tianjin facility, underscoring its importance in the company's future operations.

Looking ahead, Semco is focusing on high-growth sectors such as artificial intelligence (AI) and automotive electronics. The company plans to expand its presence in these markets by developing next-generation products like automotive MLCCs, glass substrates, and advanced semiconductor substrates, positioning itself to capitalize on emerging opportunities in the tech and automotive industries. This shift represents a major restructuring in Samsung Electro-Mechanics' global operations and signals the company's strategic transformation toward higher-margin, high-value products.