Samsung eyes Busan, LG targets Gumi as semiconductor substrate race heats up

Samsung and LG are simultaneously ramping up semiconductor substrate production lines to address a supply shortage while launching aggressive hiring drives for specialized talent.

Orders for semiconductor substrates are flooding in amid a boom in the memory chip market and a wave of AI data center expansions by major US technology companies. Both firms are throwing their full weight behind recruiting the engineering talent needed to develop higher-performance products.

Samsung Electro-Mechanics is recruiting experienced semiconductor substrate professionals to work at its Busan plant, while LG Innotek is seeking candidates for its facility in Gumi, North Gyeongsang Province, according to industry sources.

Samsung Electro-Mechanics plans to hire specialists covering the full development cycle for flip-chip ball grid array, or FC-BGA, substrates — from design and process development through quality control and stable mass production — and deploy them at its Busan site.

LG Innotek, which produces high-value semiconductor substrates at its base in Gumi, is recruiting candidates with at least four years of experience in production technology and product development.

The two leading Korean electronics component makers are concentrating their talent search in the Yeongnam region because demand for semiconductor substrates is surging and their big-tech customers are increasingly demanding higher-performance products.

If a semiconductor chip serves as the brain, a semiconductor substrate functions as the nerves and blood vessels — connecting and relaying signals from the brain to the rest of the body. It acts as the critical link between a chip and a motherboard, ensuring electrical signals flow smoothly between the two.

Server-grade FC-BGA substrates, demand for which has surged on the back of the AI boom, cover more than four times the surface area of their PC counterparts and stack more than 20 layers — more than twice as many. Greater surface area and more layers translate directly into the higher performance customers require. That means stronger margins, but also considerably greater technical difficulty.

Both Samsung Electro-Mechanics and LG Innotek see securing top-tier talent as essential to rapidly improving the yield rates and performance of next-generation semiconductor substrates.

Customer demand is expected to remain strong for the long term. Major technology companies have recently approached both firms directly, offering to cover part of the cost of expanding their substrate production lines — a strategy aimed at locking in supply through advance payments.

With orders pouring in from big-tech clients, both companies are now running at full capacity and moving quickly to expand. Samsung Electro-Mechanics announced Thursday at a national briefing on advanced industry development in the Yeongnam region that it would invest 15 trillion won ($9.65 billion) at its Busan plant to build production lines for cutting-edge AI server package substrates and high-value multilayer ceramic capacitors.

Samsung Electro-Mechanics counts Nvidia, Google, Amazon, Broadcom, Qualcomm, AMD and Tesla among its customers. The company has already brought a new factory in Vietnam online to meet rising demand, but has decided to commit additional investment to keep pace with continued growth in substrate orders.

LG Innotek committed 600 billion won to expand its FC-BGA mass production lines and other facilities in Gumi in March last year, with the investment period running through December this year. The company has also decided to expand its semiconductor substrate factory in Haiphong, Vietnam, with a groundbreaking scheduled for this month and completion targeted for May next year.

Japan's Ibiden currently holds the top position globally in AI server semiconductor substrates. Ibiden has announced capital expenditure plans worth 500 billion yen ($3.1 billion) for 2026 through 2028 to expand its production capacity, underscoring expectations that strong FC-BGA demand will persist for the foreseeable future.

The overflow of demand represents an opportunity for Korean companies chasing the market leader. In its current round of experienced-hire recruitment, Samsung Electro-Mechanics is also seeking marketing and sales professionals to identify and manage US client relationships, signaling a push to add new customers.

LG Innotek aims to grow operating profit at its semiconductor substrate division to 1 trillion won by 2031. Securities industry analysts project the division's operating profit will reach around 240 billion won this year, up from 128.9 billion won last year, with an operating margin expected to reach double digits at around 12 percent.

KB Securities forecasts that LG Innotek's FC-BGA sales, which are drawing concentrated orders from big-tech clients, will surpass 1 trillion won by 2028. With this year's projected sales at around 140 billion won, that would represent roughly eightfold growth in two years.