SEOUL — LG Innotek, an affiliate of the Republic of Korea's LG Group, has announced a plan to build its first semiconductor substrate plant in Việt Nam, marking a significant step in expanding its production capacity and strengthening its semiconductor packaging solutions business.

LG Innotek signed a memorandum of understanding (MoU) with the Hải Phòng municipal government at LG Science Park in Seoul for the investment project. The signing ceremony was attended by Hải Phòng People's Committee Chairman Đỗ Thành Trung, LG Innotek CEO Moon Hyuk-soo and senior company executives.

Under the agreement, LG Innotek will construct the new facility in Hải Phòng through its Vietnamese manufacturing subsidiary. Construction is scheduled to begin next month and be completed by May 2027.

While the company is operating a camera module plant in Việt Nam under its optical solutions business, the new project will be its first semiconductor substrate production facility in the country.

LG Innotek said Hải Phòng was selected thanks to its established infrastructure, proximity to semiconductor packaging and testing companies, and competitive production costs.

The plant will cover approximately 330,000 sq.m and manufacture 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) products.

The investment forms part of LG Innotek's dual-hub strategy, under which its Gumi facility in the Republic of Korea will serve as the parent plant focusing on research and high-value-added products, while the Hải Phòng factory will specialise in large-scale production of standard semiconductor substrates.

The company said the expansion is aimed at strengthening the competitiveness of its semiconductor packaging business and meeting growing market demand. Demand for RF-SiP substrates is expected to rise with wider adoption of 5G and the future rollout of 6G technologies, while FC-CSP and FC-BGA products are projected to benefit from increasing demand driven by on-device artificial intelligence and global AI investment.

LG Innotek noted that its semiconductor substrate production lines in Gumi are operating at near full capacity, making additional manufacturing capability essential to accommodate rising orders.

The company is also expanding domestic investment. Last March, it signed an agreement with Gumi city to invest around 600 billion KRW (US$385 million) by the end of 2026 to enhance its packaging solutions business and related operations.

CEO Moon Hyuk-soo said the diversified manufacturing strategy would help grow the semiconductor packaging solutions business into a sector generating more than 3 trillion KRW in revenue by 2030, with profitability comparable to the company's optical solutions business. — VNS