Samsung Electro-Mechanics to invest $3.14 bil. for substrate plant in Sejong
Summary
Samsung Electro-Mechanics will invest 4.27 trillion won in Sejong to expand semiconductor substrate production, marking its largest capital expenditure on a single product. The project targets flip chip ball grid array substrates for AI servers, with investment running from September 2026 through May 2028 and mass production set for September 2028. The plan is part of the company’s broader investment commitment in Chungcheong and Busan through 2040.
Key Facts
- The Sejong investment is worth 4.27 trillion won, or $3.14 billion, and is the company’s largest single-product capital expenditure on record.
- The expansion is for flip chip ball grid array substrates, which connect high-performance chips to mainboards and supply power and signals.
- The investment period runs from September 2026 to May 2028, and mass production on the new lines is scheduled to begin in September 2028.
- Samsung Electro-Mechanics said the project is tied to medium- to long-term partnerships with global Big Tech customers that include financial support and guaranteed long-term demand.
- The company also said the investment is part of a July commitment to invest 8 trillion won in the Chungcheong region and 15 trillion won in Busan by 2040.
Samsung Electro-Mechanics' flip chip ball grid array for servers / Courtesy of Samsung Electro-Mechanics
Samsung Electro-Mechanics said Monday it will invest 4.27 trillion won ($3.14 billion) to expand its semiconductor substrate production capacity at its plant in Sejong, marking the largest amount of capital expenditure on a single product in the company’s history.
According to its regulatory filing, the company will expand its production capacity for flip chip ball grid array (FC-BGA) substrates at the Sejong plant to meet growing demand from artificial intelligence (AI) servers.
The investment will run from September 2026 through May 2028, with mass production on the new lines scheduled to begin in September 2028.
This is part of the company’s commitment announced in July that it will invest 8 trillion won in the nation's central Chungcheong region, which includes Sejong, and 15 trillion won in the Busan area by 2040.
FC-BGA is a highly integrated semiconductor substrate that connects high-performance chips — such as AI accelerators, graphics processing units and central processing units — to mainboards, transmitting electrical signals and supplying power.
Demand for FC-BGA substrates has surged amid the rapid expansion of global AI infrastructure, prompting Samsung Electro-Mechanics to expand production to meet growing demand secured mainly through long-term agreements.
Samsung Electro-Mechanics said the investment will help it address growing demand for high-value semiconductor substrates in high-growth markets, including AI servers, high-performance computing and automotive applications.
The company added that the investment is based on medium- to long-term partnerships with global Big Tech customers, which includes financial supports and a guarantee for long-term demand. Through this, the company expects to secure a stable demand base and strengthen its competitiveness in the FC-BGA business.
“The importance of high-value semiconductor substrates is growing rapidly as they become key components determining semiconductor performance and supply chain stability amid the rapid growth of the AI and high-performance computing markets,” Samsung Electro-Mechanics CEO Chang Duck-hyun said.
“Based on our differentiated substrate technologies and stable supply capabilities, we will strengthen our competitiveness in the FC-BGA business across high-growth markets, including AI, servers and automotive applications.”
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