Firm to spend US$850 million at Vietnam
Samsung Electro-Mechanics held a board meeting on Thursday to approve spending US$850 million, or 1.1 trillion won, in equipment and infrastructure to manufacture flip-chip ball grid array (FC-BGA) at Vietnam.
The company will spend the amount up to 2023 to build the new FC-BGA production line.
TheElec was the first to report in September that the component arm of Samsung was planning to spend 1.1 trillion won to expand its production of semiconductor boards, such as FC-BGA.
Kinds of FC semiconductor boards include FC-BGA and FC-chip scale package (FC-CSP).
FC-BGAs are mostly used for CPUs aimed at servers and PCs, while FC-CSP is used mostly for application processors aimed at smartphones.
FC-BGAs for processors aimed at servers are the most highly-priced among them.
Samsung Electro-Mechanics is expected to manufacture FC-BGA for processors aimed at PCs and networks, while the customer is highly likely to be Intel, sources said.
The company will likely use its factory in Vietnam for rigid-flexible printed circuit boards (RFPCB) by removing the equipment there and replacing them with those for FC-BGA. It is currently selling RFPCB equipment at the factory.
Meanwhile, Samsung Electro-Mechanics is highly likely to announce an additional spending plan for FC-BGA to build another, new separate production line, the source said.
The company currently supplies this customer, which is not Intel, with FC-BGA for PCs, but is planning to supply them with FC-BGA for servers.
A Samsung Electro-Mechanics spokesperson said the company is planning to use its Vietnam subsidiary as a base of production for FC-BGA, while its facilities in Suwon and Busan in South Korea will be used for research and the production of high-end FC-BGAs.
The latest spending plan will allow the company to react to the rise in demand for package boards due to the growth in the semiconductor market, they added.
Samsung Electro-Mechanics has been looking for a new growth engine since it handed over its panel level package (PLP) business to Samsung Electronics in 2019.
It will now be competing with FC-BGA leaders such as Biden and Shinko Denki of Japan to win orders from chip giants.