LG Innotek is broadening its semiconductor substrate production presence in Vietnam by establishing a new manufacturing facility, which aligns with a larger strategy to diversify operations and enhance its package solutions sector.
The firm announced that it has entered into a memorandum of understanding at its headquarters in Gangseo District, Seoul, with the city of Hai Phong to establish a semiconductor substrate manufacturing plant in northern Vietnam.
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The upcoming facility, set to start construction in July and finish in May 2027, will cover approximately 330,000 square meters, which is about the size of 45 soccer fields.
The Vietnamese subsidiary of LG Innotek will directly finance the expansion. The facility will manufacture various high-tech semiconductor substrates, such as radio frequency system-in-package (RF-SiP), flip chip-chip scale package (FC-CSP), and flip chip-ball grid array (FC-BGA).
The firm anticipates that the strategy will improve productivity and profitability in its packaged solutions sector while bolstering overall competitiveness.
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“Under the dual-manufacturing strategy, our local facility in Gumi will serve as a mother factory dedicated to developing new technologies and producing new models and high-value products, while the expanded Vietnam facility will function as a mass-production base for general-purpose semiconductor substrates,” the company’s official says.
The funding arrives as worldwide demand for semiconductor substrates keeps rising. The demand for RF-SiP is anticipated to increase alongside wider 5G implementation and the future introduction of 6G, while the growth of FC-CSP is fueled by on-device artificial intelligence (AI) that necessitates low-power, high-performance chips. FC-BGA substrates are experiencing rising demand due to continued investments in AI infrastructure by major global technology firms.
LG Innotek announced that its semiconductor substrate manufacturing lines at the Gumi facility are currently functioning close to maximum capacity. The firm is also exploring further domestic investments concerning semiconductor substrates this year.
In March of last year, the firm entered into a deal with the city of Gumi, located in North Gyeongsang Province, to invest 600 billion won ($392.3 million) by the end of this year to enhance competitiveness in the packaging and related industries.
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“The package solutions business, with its strong profitability and growth potential, is one of LG Innotek’s key growth engines,” company CEO Moon Hyuk-soo says.
“With our dual-manufacturing strategy, we aim to expand annual revenue from the package solutions business to more than 3 trillion won by 2030 and raise its profit contribution to the level of our optical solutions business.”