Samsung Electro-Mechanics will build a production line for flip chip (FC)-ball grid array (BGA) to supply to a US chip firm, TheElec has learned.
The total spending on the line will be 1.1 trillion won with the US chip company also jointly investing in it. The pair agreed on the deal last month.
FC-BGA is mostly used for server and PC CPUs. Smartphone application processors use FC-chip scale packages (CSP). FC-BGA is a more high-value product compared to FC-CSP. FC-BGA used for servers are also more expensive than those for PCs.
Samsung Electro-Mechanics will be manufacturing FC-BGA for servers in the new line.
The South Korean company supplies FC-BGA for PCs to Intel but its supply volume of FC-BGA for servers was small. Japan’s Ibiden and Shinko Denki supplied the bulk of FC-BGA for servers used by Intel.
The latest deal with the US chip company will allow Samsung Electro-Mechanics to expand its presence in the server FC-BGA market.
It is a much needed new growth engine for the South Korean company as it handed over its panel level package business to Samsung Electronics back in 2019, and lacked new businesses.
Samsung Electro-Mechanics’ current annual sales from FC-BGA is around 500 billion won but once the new line starts operating this is expected to near triple.
Samsung Electro-Mechanics initially wanted to spend 1.7 trillion won but Samsung Group lowered this to 1.1 trillion won.
The line dedicated to the US customer will likely be built at the South Korean company’s factory in Vietnam, where equipment for rigid flexible printed circuit boards (RFPCB) are to be removed. Samsung Electro-Mechanics is planning to sell its RFPCB business.
A Samsung Electro-Mechanics spokesperson said nothing was decided yet related to spending.