Key points
▶ Samsung Electro-Mechanics will expand production capacity for FC-BGA semiconductor substrates used in AI servers, investing 4.27 trillion won at its Sejong site.
▶ The investment runs through May 2028, and the new production line is scheduled to begin mass production in September 2028.
▶ The company’s Vietnam production subsidiary will also invest 2.51 trillion won in package-substrate equipment. The combined investment in Korea and overseas totals 6.78 trillion won.
Samsung Electro-Mechanics will invest 6.78 trillion won in production of substrates for AI semiconductors: 4.27 trillion won at its Sejong site and 2.51 trillion won at its Vietnam production subsidiary. The Sejong investment is the largest the company has ever made in a single product. Samsung Electro-Mechanics disclosed the plans on the 28th.
The investment in Sejong will expand the plant’s production of FC-BGA (flip-chip ball grid array) substrates for AI servers. The investment period runs through May 31, 2028, and the new line is scheduled to begin mass production in September 2028. Samsung Electro-Mechanics currently manufactures FC-BGA substrates in Busan, Sejong and Vietnam.
On the same day, the company’s Vietnam production subsidiary also announced a 2.51 trillion won investment in local package-substrate equipment.
Samsung Electro-Mechanics said the Sejong investment is being pursued on the basis of long-term cooperation with global big-tech customers. The arrangement includes customer funding and guarantees of long-term order volumes. The company said, “We expect to strengthen the competitiveness of our FC-BGA business on the basis of stable demand going forward.”
Demand already exceeds supply. Samsung Electro-Mechanics CEO Jang Deok-hyun has said that demand for FC-BGA substrates for servers and data centers is currently more than 50% higher than production capacity. Announcing the investment, Jang said, “With differentiated substrate technology and reliable supply capabilities, we will be able to strengthen the competitiveness of our FC-BGA business in high-growth markets such as AI, servers and automotive electronics.”
FC-BGA substrates connect high-performance semiconductors, such as AI accelerators, GPUs and CPUs, to a motherboard, supplying electrical signals and power. As the name indicates, the chip is flipped over and attached directly to the substrate using closely spaced, ball-shaped bumps arranged in a grid. Compared with the older method of connecting the chip and substrate with fine wires, this shortens the distance signals travel, enabling faster data transmission and lower power consumption.
Substrates for AI accelerators are larger and have more layers than standard substrates, making them difficult to manufacture. Demand for FC-BGA is rising rapidly as investment in AI servers grows.