South Korean component makers are aiming to spend on flip-chip ball grid array (FC-BGA) to foster the business as their new growth engine.
The sums they will spend and timing are behind to their semiconductor board making rivals in Japan and Taiwan but will be enough to narrow the gap in terms of technology.
There is also currently a shortage of semiconductor boards which gives companies such as Samsung Electro-Mechanics, LG InnoTek and Daeduck Electronics an opening.
Samsung Electro-Mechanics is expected to spend over 1 trillion won to start manufacturing FC-BGA; LG InnoTek is likely to spend around 1 trillion won in the sector.
Daeduck Electronics is already executing a 400 billion spending plan, while Korea Circuit has secured a new long-term contract to supply FC-BGA will start spending in the sector to expand its production capacity.
Samsung Electro-Mechanics is likely to spend 1.1 trillion won on FC-BGA, sources say.
The spending plan includes a joint venture manufacturing line with a foreign chip company.
The South Korean component maker has so far supplied FC-BGA for PC chips to Intel.
The US chip giant currently procures FC-BGA for server chips from Japan’s Ibiden and Shinko Denki __ these boards are more expensive than FC-BGA for PC.
Earlier this month at a local tradeshow, Samsung Electro-Mechanics unveiled a new large body FC-BGA for server chips.
LG InnoTek, which currently only manufactures FC-chip scale package (CSP) for smartphone application processors when it comes to semiconductor boards, is planning to enter FC-BGA market for the first time.
The company is in need of a new growth engine: 60% to 70% of its sales come from camera modules supplied for iPhones and other Apple products.
LG InnoTek initially aimed to spend around 500 billion won but LG Group increased this to 1 trillion won in the hopes that it can better compete with Samsung Electro-Mechanics.
LG Innotek was also currently purchasing chemicals needed for FC-BGA from its suppliers, sources say.
Daeduck began its 400 billion won spending plan into FC-BGA last year. It manufactured its first product in August at its new factory in Ansan. The factory can manufacture FC-BGA for server, data center, electric vehicle, autonomous vehicle and AI chips.
Korea Circuit signed a deal worth 162 billion won a year to supply FC-BGA to a customer, which is likely Broadcom.
These spending plans will allow these South Korean companies to narrow their gap in terms of technology and production capacity with leading Japanese and Taiwanese companies.
Ibiden, Shinko Denki, Unimicron and AT&S receive purchase guarantees for their FC-BGAs and spending billions of dollars in their manufacturing facilities.
Ibiden and Shinko Denki dominate the server FC-BGA market, which relies on Intel.