Samsung Electro-Mechanics plans to invest a total of 6.78 trillion won (approximately $5.1 billion) to increase its production capacity for semiconductor substrates used in artificial intelligence (AI) servers in South Korea and Vietnam. The company is undertaking this large-scale expansion after securing investment support and long-term supply commitments from global clients. With rising demand for AI accelerators and high-performance semiconductors, Samsung Electro-Mechanics is positioning its next-generation flip-chip ball grid array (FCBGA) as a key growth driver.
On September 28, Samsung Electro-Mechanics announced it will invest 4.27 trillion won in expanding FCBGA production facilities at its Sejong plant. On the same day, the company also decided to invest 2.51 trillion won in its production facility in Vietnam for package substrates. The combined investment amounts to 6.78 trillion won.
This investment marks the largest single product investment in the company's history for the Sejong facility. The investment period extends from this month until May 2028, with new production lines expected to begin mass production in September 2028.
The focus of this investment is on high-value FCBGA for AI servers. FCBGA serves as a component that connects high-performance semiconductors, such as AI accelerators, graphics processing units (GPUs), and central processing units (CPUs), to the motherboard. It plays a crucial role in delivering electrical signals and power to the chips, directly impacting their performance and stability.
As AI semiconductors become more advanced, the technical complexity of substrates is also increasing. To integrate multiple high-performance chips into a single system, substrates need to be larger and have more layers. This is why Samsung Electro-Mechanics is concentrating its investment on high-value products for AI servers and high-performance computing (HPC).
Notably, this expansion is being pursued with a certain level of demand secured from clients, distinguishing it from previous facility investments. Samsung Electro-Mechanics explained that it has received funding support from global clients for the new facility investment and has secured long-term supply commitments. This structure reduces initial investment burdens and risks associated with future operational rate fluctuations compared to the traditional approach of building large facilities first and then securing clients.
The Sejong plant will serve as a key hub for producing high-value, high-complexity FCBGA. Meanwhile, the expansion of package substrate facilities in Vietnam will simultaneously enhance production capacity both domestically and internationally. This move is a response to the growing demand from global clients for increased supply in the expanding AI server market.
As investments in AI infrastructure continue, competition in the FCBGA market is expected to intensify. Products for AI accelerators require larger surface areas and advanced multilayer technology, creating higher entry barriers compared to traditional PC and server substrates. The faster the product sophistication, the more the technical capabilities and stable mass production abilities of substrate manufacturers will influence client acquisition.
With this investment, Samsung Electro-Mechanics aims to expand its FCBGA business centered around AI servers. Jang Deok-hyun, CEO of Samsung Electro-Mechanics, stated, "As the AI and high-performance computing markets grow rapidly, the importance of high-value semiconductor substrates is increasing. We will strengthen our FCBGA business competitiveness based on differentiated substrate technology and stable supply capabilities."
* This article has been translated by AI.
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