LG Innotek to invest $1.07 bil. to beef up substrate, camera biz
Seen is LG Innotek's plant in Gumi, North Gyeongsang Province. The company said Wednesday it will invest 1.4 trillion won ($1.07 billion) to expand production facilities in the city for chip substrates and camera modules. Courtesy of LG Innotek
By Baek Byung-yeul
Jeong Cheol-dong, CEO of LG Innotek / Courtesy of LG Innotek
LG Innotek will invest 1.4 trillion won ($1.07 billion) to bolster next-generation substrate and camera module production at its manufacturing facilities in Gumi, North Gyeongsang Province, the IT component affiliate of LG Group said Wednesday.
Its CEO, Jeong Cheol-dong, signed a memorandum of understanding in the southeastern city with Gumi Mayor Kim Jang-ho, inviting government officials including Lee Cheol-woo, the governor of North Gyeongsang Province.
The investment will be used to build a fifth plant in the city and establish a manufacturing line for next-generation semiconductor packaging substrates called flip chip ball grid arrays (FCBGA). The money will also go into expanding the production capacity of camera modules.
The fourth plant is 230,000 square meters in area. The company added that the investment will help create 1,000 additional jobs.
The investment is expected to let LG Innotek accelerate its expansion into the FCBGA business and solidify its leadership position in the camera module business. LG Innotek currently accounts for the biggest share of the global camera module market.
In order to diversify its portfolio, LG Innotek officially heralded its advance into the FCBGA market in February. Substrates are used to protect and ensure precise connections between chips and mainboards for the reliable transmission of electrical signals. Industry watchers expect demand for substrates to soar due to increased usage in high-performance chips, thanks to emerging technologies including 5G networks, artificial intelligence (AI) and self-driving technologies, which all require strong performance and high-density circuit connections.
The camera module business is a major income source for the company and LG Innotek has held the top share of that market since 2011. Its optical solutions division, which produces camera modules, generated sales of 11.8 trillion won in 2021, up 68 percent year-on-year.
“The investment will be a good opportunity for LG Innotek to grow together with the community of Gumi and our partner companies,” Jeong said, adding “We will continue to make active investments to innovate customer experiences.”