With Moon Hyuk-soo, CEO of LG Innotek, promoted to president in the 2026 regular executive reshuffle, LG Innotek is still struggling to bear fruit in new businesses. Unlike Samsung Electro-Mechanics, which supplies FC-BGA substrates for artificial intelligence (AI) servers, LG Innotek has yet to supply FC-BGA in high-value areas such as AI servers. As the company has failed to resolve its chronic dependence on Apple, there is criticism that the diversification of LG Innotek's business structure is slow. FC-BGA secures semiconductors stably and transmits electrical signals, and it is evaluated as a high-value substrate suitable for increasingly larger AI Semiconductor chips.
According to FnGuide on the 2nd, LG Innotek's operating profit outlook for this year is 665.5 billion won, which is expected to decrease compared with last year's 706 billion won. LG Innotek has been on a steady decline since 2023, when Moon became CEO. An electronics components industry official said, "As it has not reduced its dependence on Apple, business structure improvements have not been achieved," and added, "It has yet to generate meaningful revenue in new businesses such as FC-BGA."
Like Samsung Electro-Mechanics, LG Innotek selected FC-BGA as a next-generation growth engine and, after declaring entry into the FC-BGA market in 2022, invested 413 billion won through 2024 to nurture it intensively. However, there has been no news of supplying FC-BGA for AI servers, which Samsung Electro-Mechanics delivers to AMD, Google and Broadcom. FC-BGA for AI servers is considered a substrate with higher design and manufacturing difficulty and higher added value compared with substrates applied to central processing units (CPUs). Samsung Electro-Mechanics is responding by ramping up FC-BGA production line utilization to the maximum.
In the case of Samsung Electro-Mechanics, the role of President Chang Duck-hyun, a semiconductor expert, is said to have been decisive. Chang joined Samsung Electronics in 2002 and, until he took office as CEO of Samsung Electro-Mechanics in 2021, led semiconductor development and design in System LSI, which handles memory semiconductors and semiconductor design. Having worked in semiconductors for nearly 20 years, he quickly understood customer demands and technology trends, and the speed of pushing development projects translated into business results, according to assessments. By contrast, Moon joined the Optical Solution Business Division, which handles the camera module business, in 2009 and has worked in the camera module field, which has little to do with semiconductors.
Kang Seong-cheol, a research fellow at the Semiconductor Display Technology Society, said, "As advanced semiconductor packaging technology becomes more sophisticated, FC-BGA used in it also requires expertise," and explained, "Samsung Electro-Mechanics accelerated the recruitment of outside talent in the packaging field, which translated into business results."
With high entry barriers for FC-BGA for AI servers, LG Innotek is unlikely to secure mass-supply contracts next year as well. Because FC-BGA is typically supplied in customized form to corporations that design AI Semiconductor chips and the like, it is said to take several months to mount samples and go through quality certification. An electronics components industry official said, "It is expected to take at least two to three more years to supply FC-BGA for AI servers," and added, "Performance in the semiconductor substrate business will also be determined by the volume of substrates supplied for Apple's iPhone. Moon's concerns over business structure diversification will deepen."