Flip-chip ball grid arrays (FC-BGAs) are mainly used for central processing units (CPUs) and graphic processing units (GPUs) that require high-performance and high-density circuit connections. A supply shortage in the global semiconductor industry has boosted demand for FC-BGA, along with the complexity of semiconductor substrate design.
LG Innotek's move comes as South Korean companies are under pressure to reorganize their business and focus on high value-added products, as Chinese companies dominate the low-end market. It was an evitable choice to catch up with leading FC-BGA makers in Japan, Taiwan and Austria.
"Based on our semiconductor substrate business capabilities, we will foster FC-BGA as a future growth engine," Son Kil-dong, a senior managing director in charge of LG Innotek's substrate business, said after the new investment was endorsed by LG Innoteck's board on February 22.
In December 2021, Samsung Electro-Mechanics, an electric component maker in South Korea, unveiled an $851 million investment to nurture its subsidiary in Vietnam as a production hub for FC-BGA, saying it is aimed at actively responding to an increase in demand for package substrates and establishing a foundation for preoccupying high value-added product markets.
Demand is increasing as high-performance semiconductor package substrates become important due to the high performance of semiconductors and the expansion of 5G, AI, and cloud, Samsung Electro-Mechanics said, describing FC-BGA as the most difficult product to manufacture among semiconductor package substrates.
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