LG Innotek has kicked off a full-scale push to upgrade its package solution business by expanding its semiconductor substrate production base from Gumi, North Gyeongsang, in Korea to Haiphong, Vietnam. The company formalized a goal to use this as a springboard to grow revenue from the business to more than 3 trillion won by 2030.
On the 4th, LG Innotek signed an MOU on investment for expanding a semiconductor substrate plant with the city of Haiphong at LG Science Park in Magok, Seoul. With LG Innotek President Moon Hyuk-soo and Haiphong Mayor Do Thanh Trung in attendance, the agreement is seen as reflecting LG Innotek's strategic intent to accelerate its expansion from a Korea-based camera module-centered business to the semiconductor substrate business.
The expansion project will proceed as a direct investment by the local production subsidiary in Vietnam, with construction set to begin in July and completion targeted for May 2027. The site spans about 330,000 square meters (98,000 pyeong), a scale equivalent to 45 soccer fields. The expanded plant will produce key semiconductor substrate product lines such as RF-SiP (radio frequency system-in-package), FC-CSP (flip-chip chip-scale package), and FC-BGA (flip-chip ball grid array).
With this expansion, LG Innotek will fully advance a dual-site production strategy in the package solution business following optical solutions. The Gumi business site will serve as a "mother factory" specializing in new technology development and production of high-value new models, while the new Haiphong plant will function as a mass-production base for general-purpose semiconductor substrates. The plan is to boost production efficiency while also strengthening cost competitiveness.
Reasons for selecting Haiphong include: ▲ ease of building infrastructure based on existing local subsidiary operating experience ▲ strengthened customer responsiveness through geographic proximity to major semiconductor back-end companies ▲ relatively low production costs.
The key driver behind this investment decision is structurally rising demand for semiconductor substrates. Demand for RF-SiP is expected to grow with the spread of 5G smartphones and future commercialization of 6G, and FC-CSP is seeing rising demand for high-performance, low-power premium APs and memory thanks to the spread of On-device AI. FC-BGA is also experiencing simultaneous increases in demand and specifications amid expanded AI infrastructure investment by global big tech. In fact, the current Gumi production line has reached a utilization rate near full capacity.
Alongside the Vietnam expansion, domestic investment will continue. In March last year, LG Innotek signed a 600 billion won investment agreement with Gumi, North Gyeongsang, through the end of this year, and it is reportedly reviewing additional investment in line with the growing trend in semiconductor substrate demand.
President Moon Hyuk-soo said, "The package solution business is a core growth engine for LG Innotek that combines profitability and growth potential," adding, "Through strategic investments such as dual-site production, we will achieve more than 3 trillion won in revenue by 2030 and raise profit contribution to the level of the optical solutions business."