LG Innotek starts mass production of FC-BGA for PCs, eyes revenue diversification impact

We have begun mass production of high-value semiconductor substrates flip-chip (FC)-ball grid array (BGA) to supply two global big tech corporations. Currently, we are delivering for PCs first, but we have also completed certification for server FC-BGA substrates and plan to expand sales. While we rely heavily on revenue from the camera module business, we expect the effects of business diversification to reflect in our performance as early as the fourth quarter.

Moon Hyung-soo, CEO of LG Innotek, spoke with reporters after the regular shareholders' meeting for 2025 held on the 24th at LG Innotek's headquarters in Gangseo-gu, Seoul. On this day, CEO Moon explained LG Innotek's business plans for this year along with its medium- to long-term growth strategy stemming from portfolio diversification.

CEO Moon explained that he would alleviate concerns about the high reliance on Apple, which is raised annually, through diversification of revenue sources. He said, "Mobile products have a high realization rate of business plans as new products are launched annually, but semiconductors and electronics tend to press forward with product mass production over a longer horizon," adding, "As we are securing about 4 trillion won in orders annually, the impact of diversifying our revenue sources will begin to be reflected in our performance from the fourth quarter."

Last year, as Apple diversified its suppliers for the camera modules used in the iPhone 16 series, LG Innotek was hit in terms of profitability. LG Innotek’s operating profit last year was 706 billion won, down about 15% compared to the same period the previous year. Apple accounted for over 70% of LG Innotek’s total revenue.

LG Innotek plans to focus on cost reduction through the new factory in Vietnam, which is set to complete its expansion in June this year. This expansion will more than double the camera module production capacity of the Vietnam factory. Alongside this, the company plans to continuously enhance its cost competitiveness through the implementation of artificial intelligence (AI) and digital twin technologies. CEO Moon stated, "Compared to Chinese competitors who have entered the North American customer supply chain, we are not significantly lagging in price competitiveness," adding, "We are planning to produce cameras, where price competition is fierce, in Vietnam to establish cost competitiveness."

He added, "There is not a significant technological gap with Chinese corporations in general-purpose camera modules, but considering that high-end camera modules incorporating continuous zoom technology are still ahead in terms of technology, we will likely adjust our portfolio to focus on this area."

CEO Moon stated that he aims to accelerate the seizing of the FC-BGA market, a high-value semiconductor substrate that he announced for entry in 2022. He said, "The time when we will enter a full growth trajectory is expected to be next year," further explaining, "Because the investment scale has been significant, we expect to cross the breakeven point the year after next, and we are steadily mass production as per our plans."

CEO Moon predicted that the full commercialization of the glass substrate project, which is being pursued as a new business, may occur as early as 2027. He noted, "The technologies required for developing glass substrates are not yet mature," adding that he expects the equipment introduction to be completed around October this year, and emphasized that substantial development will begin in collaboration with big tech corporations from the end of this year.

He also mentioned plans to enter the humanoid robot market. CEO Moon stated, "Robot corporations are introducing humanoids to the market, and they are expected to be partially applicable from next year, so we are preparing for mass production for this purpose," adding, "While the quantity will not be large, it is expected that around several thousand will be equipped, and projections currently indicate a tenfold growth annually."