Samsung Electro-Mechanics and LG Innotek Ramp Up AI Semiconductor Substrate Production
Samsung Electro-Mechanics and LG Innotek are accelerating their AI semiconductor substrate business. Samsung recently started operations at its Vietnam Flip-Chip Ball Grid Array (FC-BGA) factory. Both companies aim to gain a competitive edge in the semiconductor substrate market, currently dominated by Taiwan and Japan.
According to industry sources on June 26, Samsung’s production plant in Vietnam has started mass production of FC-BGA products, a project into which over 1 trillion won ($74.1 million) has been invested since 2021. The substrates are expected to be used in AI-equipped notebooks, tablets, smartphones, and potentially extend to server and network, and automotive electronics.
Samsung Electro-Mechanics plans to begin mass production of AI-specific FC-BGA substrates in the latter half of this year. President Choi Duk-hyun of Samsung Electro-Mechanics indicated in March, “We plan to start mass production of AI FC-BGAs in the second half of this year and are in discussions with various clients. Through diversifying applications and clients, we aim to more than double our AI-related sales annually.”
LG Innotek also started the mass production of FC-BGAs in February, at its Gumi plant, primarily for IT purposes. The company, under the leadership of CEO Moon Hyuk-soo, reported ongoing quality tests with clients and projected a rise in sales as early as August or by October at the latest.
FC-BGA is a highly integrated package substrate that connects semiconductor chips to motherboards, predominantly used in high-performance computing. With the growth of big data and machine learning, the FC-BGA market is also expected to expand. According to Fujikam Comprehensive Research Institute, the global FC-BGA market is projected to grow from $8 billion in 2022 to $16.4 billion by 2030.
Currently, companies from Japan and Taiwan, such as Ibiden, Shin-Etsu Chemical (Japan), and Unimicron (Taiwan), dominate this market. In 2022, Japanese and Taiwanese companies held a 69% market share, while Korean companies had about 10%.
