LG Innotek said on Tuesday that it will spend 413 billion won on manufacturing flip-chip ball grid array (FC-BGA), its official confirmation of entering the high-end semiconductor board market.
The South Korean component maker said it will spend the fund up to April 2024.
FC-BGA is harder to manufacture compared to flip-chip chip-scale package (CSP) that LG Innotek already manufacturers for application processors.
Sources said the amount is similar to the amount LG Innotek considered last year. The firm had once considered expanding its investment volume up to 1 trillion won but returned to its original plan late last year, they said.
The investment volume indicates that it will be enough for the company to enter niche markets, they said, when compared to spending from market leaders such as Ibiden and Shinko Denki.
Compatriots Daeduck Electronics and Korea Circuit had previously announced spending plans of 400 billion won and 200 billion won, respectively.
Samsung Electro-Mechanics, which already manufactures FC-BGA, last year announced another 1 trillion won spending plan in the sector.
LG Innotek likely couldn’t match this as it has already announced a spending plan of over 1 trillion won for its camera module business last year, the source said.
LG Innotek will be able to manufacture FC-BGA next year at the earliest. This is because the lead time for some of the key equipment __ such as those for lithography and laminators __ needed for production has been extended to over a year due to the Covid-19 pandemic. Lead time for these equipment used to be around six months prior to the pandemic.