As smartphone launch prices rise due to a memory chip crunch—likely intensifying shipment declines and pressure on component suppliers to cut unit prices—LG Innotek is seeking a breakthrough by expanding its semiconductor substrate business. More than 80% of total revenue comes from Apple iPhones, so the strategy is to expand supply of semiconductor substrates, where demand is growing.
According to the industry on the 27th, LG Innotek is expected to face shipment declines and pressure to lower component prices this year due to the ripple effects of rising memory prices. Kim Dong-Won, an analyst at KB Securities, said, "With memory chip prices surging, subsequent mobile price hikes and the resulting demand and volatility are potential risk factors for LG Innotek's earnings."
Concerns appear to stem from the company's heavy reliance on Apple for this year's results as well. While the boost from last year's iPhone 17 launch is expected to continue through the first half, supply of high-value camera modules for the iPhone 18 series, expected to launch in the second half, is also forecast to expand. This year's camera modules will have higher pixel counts, and a variable aperture is also slated to be adopted.
LG Innotek has said that supply of existing semiconductor substrates such as flip chip–chip scale package (FC-CSP) and radio frequency system-in-package (RF-SIP) is expanding. At "CES 2026," the world's largest IT and home appliance show, on the 7th (local time), Moon Hyuk-soo, CEO of LG Innotek, said, "Demand for semiconductor package substrates is expected to continue increasing for the time being, and LG Innotek's semiconductor substrate utilization is at full capacity," adding, "We are reviewing various ways to expand package solution production capacity to meet demand."
FC-CSP, which has been used to package low-power DRAM (LPDDR) for mobile devices, is expanding its applications to SOCAMM, which stacks multiple LPDDRs and is mounted on artificial intelligence (AI) chips. Last year, the company received approval from SK hynix for substrates for GDDR7, and supply is expected to expand. RF-SIP, which has been used as a mobile communication semiconductor substrate, is also seeing rising supply in line with advances in mobile performance.
A component industry official said, "As applications for FC-CSP and RF-SIP—LG Innotek's key semiconductor substrate products—expand, operating profit is increasing," adding, "There are concerns about lower shipments of camera modules and price cuts for components, but growth in the semiconductor substrate business is strong enough to offset that. Expectations are also rising as the FC-BGA business adds to performance."
With flip chip–ball grid array (FC-BGA) supply set to begin in the second half, revenue growth is expected to kick into high gear. LG Innotek plans to supply FC-BGA to Intel, among others. Kim Min-kyung, an analyst at Hana Securities, said, "The package solution business institutional sector is expected to continue improving profitability by expanding supply to RF-SiP and memory customers," adding, "FC-BGA is also expected to accelerate narrowing losses by expanding its customer base. The package solution line utilization rate exceeded 90% last year, suggesting there is room for additional capacity expansion."