LG Innotek has identified ABF substrates as its new source of growth momentum, and is building a new production line for the product, according to a Korean media report.
According to Ddaily, LG Innotek is building an ABF substrate production line at its Gumi plant and is scheduled to enter mass production in the second half of 2023.
LG Innotek reportedly is in discussion with various brands about becoming their supplier. The company has a close partnership with Apple in the camera module sector, and the hope is that this partnership can be replicated in the ABF substrate sector, the report said. IT firms, such as Intel and AMD, are also considered potential customers for LG Innotek.
The ABF substrate is mainly used in high-added-value chips for CPUs and GPUs. However, the technological barrier and production cost of the ABF substrate is also higher. Since the COVID pandemic, ABF substrates have been experiencing a supply shortage, prompting many firms to invest massive amounts of money into the sector.
In the past, LG Innotek has accumulated experience in producing radio frequency (RF) SiP substrates and 5G mmWave AiP substrates. After Chul-dong Chung took office as president of LG Innotek back in March 2019, the company began to actively adjust its business structure. First, it withdrew from the HDI and LED sectors. Then, it chose the ABF substrate sector as the new source of growth.
The ABF substrate market is currently headlined by the likes of Ibiden, Shinko Denki, Unimicron, Nan Ya PCB, and AT&S. South Korean firms are relatively behind in terms of market influence. However, recently, companies like Semco, Daeduck, and Korea Circuit have been making large-scale investments. Semco started delivering ABF substrates for servers in November 2022.
Article translated by Jack Wu
