LG Innotek to expand chip substrate plant in Vietnam

LG Innotek headquarters in Gangseo District, Seoul / Courtesy of LG Innotek

LG Innotek is expanding its semiconductor substrate manufacturing footprint to Vietnam with a new production plant as part of a broader strategy to diversify production and scale up its package solutions business.

The company said that it signed a memorandum of understanding at the company’s headquarters in Gangseo District, Seoul, with the city of Hai Phong to build a semiconductor substrate production facility in northern Vietnam.

The new facility, scheduled to begin construction in July and be completed in May 2027, will span about 330,000 square meters, roughly equivalent to 45 soccer fields. The expansion will be funded directly by LG Innotek’s Vietnamese subsidiary.

The plant will produce a range of advanced semiconductor substrates, including radio frequency system-in-package (RF-SiP), flip chip-chip scale package (FC-CSP), and flip chip-ball grid array (FC-BGA).

“Under the dual-manufacturing strategy, our local facility in Gumi will serve as a mother factory dedicated to developing new technologies and producing new models and high-value products, while the expanded Vietnam facility will function as a mass-production base for general-purpose semiconductor substrates,” the company’s official said.

The company expects the strategy to enhance productivity and profitability in its package solutions business while strengthening overall competitiveness.

The investment comes as global demand for semiconductor substrates continues to climb. RF-SiP demand is expected to rise with broader 5G adoption and future rollout of 6G, while FC-CSP growth is being driven by on-device artificial intelligence (AI) requiring low-power, high-performance chips. FC-BGA substrates are also seeing increased demand amid sustained AI infrastructure investment by global big tech companies.

LG Innotek said its semiconductor substrate production lines at its Gumi facility are already operating near full capacity.

The company is also considering additional domestic investments related to semiconductor substrates this year.

In March last year, the company signed an agreement with the city of Gumi, North Gyeongsang Province, to invest 600 billion ($392.3 million) won by the end of this year to strengthen competitiveness in packaging and related businesses.

“The package solutions business, with its strong profitability and growth potential, is one of LG Innotek’s key growth engines,” company CEO Moon Hyuk-soo said.

“With our dual-manufacturing strategy, we aim to expand annual revenue from the package solutions business to more than 3 trillion won by 2030 and raise its profit contribution to the level of our optical solutions business.”