"Recently, we began mass production of flip chip (FC)-ball grid array (BGA) to be supplied to North American big tech corporations. In addition, we are pursuing development collaborations with various global big tech corporations."
Moon Hyuk-soo, CEO of LG Innotek, noted that during a meeting with reporters on Jan. 8 (local time) at the world's largest electronics and IT exhibition, CES 2025, LG Innotek successfully mass-produced FC-BGA substrates for networks and modems as well as for digital TVs using the pilot production line at its Gumi Plant 2, just six months after entering the market in 2022. The company acquired Gumi Plant 4 (approximately 220,000 square meters) from LG Electronics the same year and established a new FC-BGA production line. This mass production will also be carried out at the new Gumi plant.
LG Innotek announced its plan to gradually enter the high-value-added FC-BGA market for AI and servers and to develop FC-BGA into a trillion-won business. The company aims to build a balanced business portfolio through the growth of new businesses such as AI semiconductors and FC-BGA, securing long-term growth drivers.
As a relatively latecomer in the FC-BGA market, LG Innotek is accelerating its market penetration by establishing its Gumi Plant 4 as a 'dream factory' equipped with the industry's highest level of AI and automated processes. The strategy is to shorten the FC-BGA processing time and improve yields through this digital manufacturing innovation. CEO Moon stated, "Smart factories require initial investments, but they significantly increase yields and are a differentiating factor for LG Innotek that allows it to achieve both technological and price competitiveness." He added that not only the dream factory but also plans for equity investments and mergers and acquisitions (M&A) related to FC-BGA will be actively explored to accelerate market penetration.
Along with questions about glass substrate outlook and development status, CEO Moon stated, "Glass substrates are expected to start being used for mass production in communications semiconductors in 2 to 3 years, and for servers, glass substrates will be primarily used in about 5 years" and added, "LG Innotek is now investing in equipment and will fully begin mass production of glass substrates from the end of this year." He also remarked, "(Glass substrates) are the direction we must go, and many companies are weighing the timing for mass production at this stage. LG Innotek is also preparing to ensure we are not late."
LG Innotek is pursuing a strategy to secure cost competitiveness through global production site operations and factory automation. CEO Moon said, "To prepare for intensified global competition, we are ready to utilize overseas factories in Vietnam and Mexico and have focused on factory automation through digital transformation (DX)," and added, "Once the depreciation period ends and the expansion of the factory in Vietnam is completed this year, the cost competitiveness of the camera module business will improve, and revenue will be enhanced."
LG Innotek plans to utilize the new factory in Vietnam, which is expected to be completed around June, as a production base for smartphone camera modules. This expansion will more than double the camera module production capacity of the Vietnamese plant. Along with this, the company aims to continuously enhance cost competitiveness by establishing AI and digital twin technologies.
CEO Moon stated that the company is also advancing development in the rapidly growing humanoid sector during the AI era. He noted, "Based on LG Innotek's global leading camera technology, we are actively collaborating with major leading corporations in the humanoid sector" and added, "We are collaborating with more than half of the 14 humanoids that appeared in this CES keynote speech."