LG Innotek aims high with new chip substrate plant

LG Innotek said Monday it will ramp up development of its flip chip ball grid array packages, or high-density package substrates to secure a top position in the market.

"FC-BGA is a sector LG Innotek can excel in, as the company has been leading the global substrate material market with its unrivaled technology and productivity," said LG Innotek's president and CEO, Jeong Cheol-dong.

"We will create differentiated customer value so the company can lead the global FC-BGA market."

An FC-BGA is a semiconductor package substrate that connects a semiconductor chip to the main board. FC-BGAs are used in CPUs and GPUs for computers, servers and network devices. The demand for FC-BGAs has rapidly grown due to the improvement in chipset performance and the spread of a work-from-home culture.

The South Korean electronics component manufacturer recently held an equipment entry ceremony at its factory in Gumi, North Gyeongsang Province, that is currently constructing the production line for FC-BGAs. The company purchased the 220,000-square-meter plant in June last year.

The new factory will facilitate various smart technologies, including artificial intelligence and robots, and will start production in the second half of this year, the company said.

LG Innotek injected 413 billion won ($336 million) into the FC-BGA facility and equipment, and it will continue to make investments to boost production, the company said. The company chose FC-BGAs as its future growth engine, and formed two executive-level divisions in December 2021.

The company succeeded in mass-producing FC-BGAs for network modems and digital TVs in only four months, after it announced its entry into the market in February 2022.

The company introduced its latest FC-BGA product at the CES in Las Vegas early this month.

According to Fuji Chimera Research Institute, the size of the global FC-BGA market is projected to reach $16.4 billion by 2030 from $8 billion in 2022, with an average annual growth rate of 9 percent.

By Jo He-rim (herim@heraldcorp.com)