LG Innotek to invest $67.9 mil. to expand car AP module facility

A view of LG Innotek's plant in Gwangju / Courtesy of LG Innotek

LG Innotek will invest 100 billion won ($67.9 million) to expand its manufacturing facility in Gwangju, adding production lines for automotive application processor (AP) modules as part of its effort to grow its automotive electronics business, the company said on Tuesday.

The company signed a memorandum of understanding with the Gwangju Metropolitan Government to build the AP module production lines. With the expansion of the new facility, scheduled to open this December, the total floor area of the Gwangju site will reach about 97,000 square meters.

Automotive AP modules are compact, high-performance system-on-chip units that act as the "brain" of a vehicle, integrating and controlling its electronic systems. This area is emerging as a new business for the company, which began development last year.

With the rise of autonomous and connected vehicles, the global vehicle AP module market is projected to grow at an annual rate of about 22 percent. However, despite the growth outlook, only a handful of suppliers currently have production capabilities.

LG Innotek has been moving quickly to capture the early market share, leveraging its advanced technologies and expertise in mobility solutions.

The company began supplying automotive AP modules to global semiconductor companies late last year and is actively seeking to expand its client base. Through the latest investment, LG Innotek aims to further strengthen the competitiveness of its automotive AP module business and solidify its edge over rivals.

“Since its establishment in 1985, the Gwangju site has served as the ‘mother factory’ for our mobility solutions business, which drives LG Innotek’s growth,” LG Innotek CEO Moon Hyuk-soo said.

“As a strategic hub that underpins our core businesses, we’ll continue to work closely with the local community and partner companies to grow together and deliver exceptional value to our customers.”

The Gwangju plant currently employs about 900 people and serves as a key production base for its mobility solutions, manufacturing in-vehicle communication, lighting and camera modules.

LG Innotek operates a total of five business sites in Korea — Gumi in North Gyeongsang Province, Paju and Ansan in Gyeonggi Province, Magok in Seoul and Gwangju.

Last March, the company announced an investment of around 600 billion won to expand flip-chip ball grid array production and install new equipment for high-value camera module manufacturing at its Gumi site, with completion expected by the end of this year.