LG Innotek is moving to diversify production of semiconductor package substrates by adding a major manufacturing base in Vietnam. The company aims to grow its substrate business to more than 3 trillion won in revenue by 2030.
On May 4, LG Innotek signed a memorandum of understanding (MOU) with the city of Haiphong, Vietnam, at LG Science Park in Seoul to expand its semiconductor substrate production capacity.
The new plant will be built in an industrial complex in Haiphong. LG Innotek's Vietnamese subsidiary will make a direct investment, with construction slated to begin in July and completion targeted for May 2027.
The site will cover about 330,000 square meters, equivalent to roughly 45 soccer fields. The plant will produce high-end semiconductor package substrates such as radio frequency system-in-package (RF-SiP), flip-chip chip scale package (FC-CSP), and flip-chip ball grid array (FC-BGA).
The expansion is widely seen as a move to meet surging demand for semiconductor substrates driven by the rapid growth of artificial intelligence (AI). RF-SiP demand is expected to rise on the back of increasing 5G smartphone adoption and the eventual rollout of 6G. FC-CSP is poised for growth as sales of high-value, premium application processors (APs) and memory products increase. FC-BGA demand and technical requirements are also soaring as global Big Tech companies continue to ramp up investment in AI infrastructure.
LG Innotek's chip substrate lines at its Gumi plant are already operating close to full capacity, making additional investment necessary to respond to market growth.
Haiphong is already home to LG Innotek's camera module plant. The company cites several advantages to expanding in the region: the ease of building out infrastructure after years of operating a local production subsidiary, closer proximity to major OSAT (outsourced semiconductor assembly and test) providers that strengthens customer responsiveness, and improved cost competitiveness.
LG Innotek is also reviewing additional domestic investments related to semiconductor substrates this year. In March last year, the company signed a 600 billion won investment agreement with Gumi City in North Gyeongsang Province to strengthen competitiveness in package and related businesses by the end of this year, and is now planning further investment on top of that.
Through these moves, LG Innotek intends to apply a dual-site strategy for its semiconductor substrate business, mirroring the structure already in place for its camera module operations in Gumi and Vietnam. The Gumi plant will serve as a “mother factory,” focusing on developing new substrate technologies and producing new models and high value-added products, while the Vietnamese plant will be used as a mass-production base for more standardized semiconductor substrates.
“The package solution business, which combines both profitability and growth potential, is one of our core growth engines,” said Moon Hyuk-soo, CEO of LG Innotek. “By implementing our dual-site production strategy, we plan to expand package solution sales to over 3 trillion won by 2030 and raise its profit contribution to be on par with our optical solutions business.”
