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Samsung Electro-Mechanics Commits $4.9B to AI Substrates
Samsung Electro-Mechanics approved 6.78 trillion won in investments to expand package-substrate capacity in South Korea and Vietnam. The projects target FC-BGA substrates used in AI accelerators and server CPUs, with new Sejong production l
AI.info Team · Written with AI · fact-checked ·
Samsung Electro-Mechanics approved 6.78 trillion won ($4.9 billion) in investments on September 28 to expand semiconductor package-substrate production in South Korea and Vietnam. The plan allocates 4.27 trillion won to the company’s Sejong plant and 2.51 trillion won to facilities at its Vietnamese production subsidiary. The Sejong project is the company’s largest investment in a single product line, according to Seoul Economic Daily.
Two sites, two construction schedules
The Sejong investment runs through May 31, 2028, with mass production on new lines scheduled to begin that September. Samsung Electro-Mechanics plans to complete the Vietnam expansion by April 30, 2028. Building capacity at both locations gives the company additional production at home and overseas as it prepares to serve larger orders over the medium and long term.
The 4.27 trillion won Sejong commitment equals 43.6% of the company’s consolidated shareholders’ equity at the end of last year, the report said. Samsung had announced an 8 trillion won investment plan for Sejong in July; the new project forms part of the site’s development as a base for higher-value semiconductor substrates.
FC-BGA sits between AI chips and the motherboard
The expansion centers on flip-chip ball grid array, or FC-BGA, substrates. These high-density components connect processors and accelerators to a mainboard, carrying electrical signals and power. AI accelerators and server CPUs are among their applications, alongside network equipment and automobiles.
As high-performance chips become more powerful and densely integrated, their package substrates must support more demanding connections. Samsung’s investment addresses that manufacturing requirement by adding capacity for FC-BGA, rather than producing the AI processors themselves. The company is positioning the substrates as a growth business alongside rising demand for AI and server hardware.
Customer commitments underpin the capacity push
Seoul Economic Daily reported that the projects rest on medium- to long-term cooperation with global technology customers, including customer funding support and guaranteed volumes. The report did not identify those customers, so the investment cannot be tied from the available information to any specific chipmaker. Such arrangements, if they deliver the expected orders, would give Samsung a clearer demand basis for expanding capacity well before the Sejong lines begin mass production.
Samsung Electro-Mechanics President Chang Duck-hyun said the company intends to strengthen its FC-BGA business in AI, servers and automotive electronics. “Based on differentiated substrate technology and stable supply capabilities, we will strengthen our FC-BGA business competitiveness in high-growth markets such as AI, servers, and automotive electronics,” he said, according to The Chosun Daily.
Production is still years away
The scale of the commitments makes execution the next concrete test: Samsung must build the facilities, equip production lines and bring them into operation on schedule. Sejong’s planned mass-production start is September 2028, while the Vietnam project is due for completion several months earlier. Those dates set the timetable for when the new capacity can begin serving customer demand.