LG Innotek (011070.KS) will expand its semiconductor substrate production lines through its production subsidiary in Vietnam. As demand for semiconductor substrates that connect AI chips surges amid expanding investment in artificial intelligence (AI) data centers, LG Innotek has launched a race to expand its production capacity.
LG Innotek signed a memorandum of understanding (MOU) with Haiphong, Vietnam, for an investment to expand its semiconductor substrate plant at LG Science Park in Magok, Seoul, on Friday. Moon Hyuk-soo, president of LG Innotek, and Do Thanh Trung, mayor of Haiphong, Vietnam, attended the signing ceremony.
Under the agreement, LG Innotek will push to build a semiconductor substrate plant in Haiphong, Vietnam. The investment will be carried out directly by its Vietnamese production subsidiary. Construction will begin in July and is scheduled to be completed in May next year. The site spans approximately 330,000 square meters (98,000 pyeong), equivalent to 45 soccer fields.
LG Innotek decided to expand the production lines of its Vietnamese subsidiary, which had been responsible for optical solution products, as semiconductor substrate orders increased significantly. The utilization rate of the semiconductor substrate production lines in Gumi, North Gyeongsang Province, jumped from 80.8% at the end of last year to 91.8% in the first quarter of this year, effectively operating at full capacity.
The expanded plant will produce major semiconductor substrates including radio frequency system-in-package (RF-SiP), flip chip chip scale package (FC-CSP), and flip chip ball grid array (FC-BGA). "The Gumi site will serve as a 'mother factory' responsible for developing new semiconductor substrate technologies and producing new models and high-value-added products, while the expanded plant in Vietnam will be operated as a production base for general-purpose semiconductor substrates," an LG Innotek official explained.
Separately from the Vietnam investment, LG Innotek is also reviewing additional domestic investment in semiconductor substrates. "The package solution business is a key growth axis with both profitability and growth potential," President Moon Hyuk-soo said. "Through strategies such as dual production sites, we will expand package solution business sales to more than 3 trillion won by 2030 and raise its profit contribution to the level of the optical solution business."
