Samsung Electro-Mechanics plans to invest approximately 2.5 trillion won (about $1.85 billion) to expand its semiconductor packaging substrate production facilities in Vietnam. As Samsung's production base in Vietnam shifts towards high-value semiconductor components, the number of local companies participating in the supply chain has increased to 340. However, the advanced component supply capabilities of local firms remain limited, highlighting the need to enhance the technological competitiveness of the industrial ecosystem alongside the expansion of production facilities.
According to Vietnamese economic media CafeF on October 12, Samsung Electro-Mechanics announced its investment plan to expand its semiconductor packaging substrate production facility in Thai Nguyen Province, Vietnam, with an investment of about $1.85 billion. This investment is part of a larger plan to invest a total of $5.05 billion in its Sejong plant in South Korea and its Vietnamese subsidiary.
Samsung Electro-Mechanics aims to increase its high-value semiconductor substrate production capacity by investing approximately $3.18 billion in the Sejong plant, while also responding to the growing demand from global customers in Vietnam. The new facility in Vietnam is expected to be completed and operational by June 2030.
The flip-chip ball grid array (FCBGA) is a key component that connects high-performance semiconductors, such as artificial intelligence (AI) accelerators, graphics processing units (GPUs), and central processing units (CPUs), to the motherboard, facilitating the transfer of power and electrical signals. As the AI server and high-performance computing markets grow, the demand for high-value semiconductor packaging substrates is also increasing.
Jang Deok-hyun, CEO of Samsung Electro-Mechanics, stated, "As the AI and high-performance computing markets rapidly grow, high-value semiconductor substrates are becoming increasingly important as key components that influence semiconductor performance and supply chain stability."
With Samsung's increased investment in Vietnam, local companies are also expanding their participation in the supply chain. According to the Ministry of Industry and Trade of Vietnam, the number of Samsung's local first-tier suppliers was only four in 2014, but it has now surged to 340, including both first and second-tier suppliers.
However, the increase in the number of suppliers has not sufficiently translated into an expansion of advanced manufacturing capabilities. Local companies primarily supply consumables, packaging materials, printed materials, and components with lower technical difficulty. While the number of companies participating in Samsung's supply chain has grown, their ability to produce and supply high-value components remains limited.
A similar issue is evident in Vietnam's overall parts and materials industry. A survey conducted by the Ministry of Industry and Trade in 2024 found that only about 30% of the 7,000 related companies participated in the global supply chain and value chain. Seventy-five percent of the total supplied products only to the domestic market, while 8% focused solely on exports, and 17% engaged in both domestic and export activities.
In particular, the local supply capacity for advanced industry components lags behind other manufacturing sectors. Vietnam's self-supply capability for parts in the motorcycle sector reaches 85-95%, but it is only 30-50% in the electronics and information communication sector, and just 5-10% in the advanced technology industry.
To bridge this gap, Samsung has been supporting local companies to enhance their production capabilities. From 2015 to 2021, Samsung conducted production innovation consulting for 379 Vietnamese companies and trained 406 production innovation experts from 2018 to 2021. The support areas have since expanded to include smart factories, molds, and automation. This year, an additional 14 companies are being supported, bringing the total number of smart factory support recipients to 96, with 241 related professionals trained.
Support has also been provided in the mold and automation sectors. Samsung is assisting six companies in the smart mold sector and five in automation to help local firms advance their manufacturing technologies.
Looking ahead, Samsung plans to further expand its collaboration with Vietnamese companies across various regions and technological fields. The goal is to move beyond simply increasing the number of suppliers to enabling local companies to secure their own technological competitiveness and participate in the global supply chain.
In this regard, at a global supply chain seminar held in Vietnam on October 8, Cha Ji-ho, Deputy General Manager of Samsung's Vietnam Purchasing Center, outlined three future collaboration directions: expanding the scope, deepening capabilities, and systematic linkage. Cha stated, "We aim to develop our collaborative activities 'broader,' 'deeper,' and 'more systematically.'"
Initially, Samsung plans to expand its support projects currently conducted around major production hubs such as Bac Ninh and Ho Chi Minh City to key industrial areas in northern and southern Vietnam, including Phu Tho, Hai Phong, and Thai Nguyen. The support content will also be tailored to individual company needs, including smart factory construction, mold technology improvement, and automation consulting.
In particular, Samsung aims to identify key personnel within companies to sustain production innovation and enhance practical skills to lead their own innovation activities.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.