Key facts
- Samsung Electro-Mechanics is investing nearly $5 billion by 2028 in semiconductor substrates.
- The investment will expand production of flip-chip ball grid array (FC-BGA) substrates.
- FC-BGA substrates are critical components for AI servers and high-performance computing.
- Demand for these substrates has outstripped production capacity.
- The investment includes 4.27 trillion won for the Sejong plant in South Korea and 2.51 trillion won for Vietnam.
- Global big-tech customers will provide mid- to long-term supply commitments and capital for new facilities.
Samsung Electro-Mechanics (SEMCO) is significantly expanding its production of specialized semiconductor substrates, committing nearly $5 billion by 2028 to bolster its manufacturing capabilities in South Korea and Vietnam. This substantial investment targets flip-chip ball grid array (FC-BGA) substrates, crucial components that connect high-performance processors to circuit boards and have become a bottleneck in the AI hardware supply chain.
The company's board approved a total of 6.78 trillion won (approximately $4.99 billion USD) for new capital spending. The larger portion, 4.27 trillion won ($3.14 billion USD), will be directed to SEMCO's Sejong plant in South Korea to construct new production lines for AI server FC-BGA substrates. Equipment spending for this facility is slated to run through May 2028, with mass production expected to commence in September 2028. The remaining 2.51 trillion won ($1.85 billion USD) will be invested in SEMCO's Vietnamese subsidiary to acquire additional package substrate production equipment by April 30, 2028. The total investment in Vietnam may exceed the disclosed equipment figure due to excluded construction costs.
SEMCO President and CEO Chang Duck-hyun highlighted the growing importance of these high-value-added substrates for AI and high-performance computing markets, emphasizing their role in semiconductor performance and supply-chain stability. The investment is reportedly backed by mid- to long-term supply commitments from unnamed global big-tech customers, who will also contribute capital and guarantee future output. FC-BGA substrates are essential for enabling high-speed data transmission between chips and mainboards, and demand for larger, multilayer versions has surged with the increasing use of powerful semiconductors in AI servers.