LG Innotek has kicked off a full-scale upgrade of its package solution business by expanding its semiconductor substrate production base from Gumi, North Gyeongsang, 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.
LG Innotek on the 4th signed an MOU on investment to expand a semiconductor substrate plant with Haiphong, Vietnam, at LG Science Park in Magok, Seoul. With President Moon Hyuk-soo of LG Innotek and Haiphong Mayor Do Thanh Trung in attendance, the agreement is seen as a move that reflects LG Innotek's strategic intent to accelerate its external expansion from its domestic camera module-centered business to the semiconductor substrate business.
The expansion project will proceed through direct investment by the local production subsidiary in Vietnam, with construction set to start in July and completion targeted for May 2027. The site will cover about 330,000 square meters (98,000 pyeong), a size 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 implement a dual production base strategy in its package solution business following optical solutions. The Gumi business sites will serve as a "mother factory" specialized in new technology development and high-value new model production, 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.
The reasons for choosing Haiphong include: ▲ ease of building infrastructure based on existing experience operating a local subsidiary ▲ enhanced customer responsiveness through geographic proximity to major semiconductor back-end firms ▲ relatively low production costs.
The core backdrop of this investment decision is the structural expansion of demand for semiconductor substrates. Demand for RF-SiP is expected to increase with the spread of 5G smartphones and the future commercialization of 6G, while FC-CSP is seeing rising demand for premium high-performance, low-power APs and memory driven by the spread of On-device AI. FC-BGA is also experiencing simultaneous increases in demand and specifications as global big tech expands AI infrastructure investment. In fact, the current Gumi production line has reached operating rates close to full capacity.
Domestic investment will continue alongside the Vietnam expansion. LG Innotek in March last year signed an investment agreement worth 600 billion won with Gumi, North Gyeongsang, through the end of this year, and is reportedly reviewing additional investments in line with the trend of expanding demand for semiconductor substrates.
President Moon Hyuk-soo said, "The package solution business is LG Innotek's core growth engine with both profitability and growth potential," adding, "Through strategic investments such as dual production bases, we will achieve more than 3 trillion won in revenue by 2030 and raise the profit contribution to the level of the optical solutions business."