[Click eStock] "Packaging Substrate Supply Shortage for Years... LG Innotek to Make Trillion-Won Additional Investment"

[Asia Economy Reporter Ji Yeon-jin] Korea Investment & Securities stated on the 23rd that it maintains a buy rating and a target price of 380,000 KRW regarding LG Innotek's announced investment plan to establish an FC-BGA (packaging substrate) mass production line, indicating that the supply shortage of packaging substrates will continue for the coming years.

Choi Cheol-hee, a researcher at Korea Investment & Securities, said, "Top-tier packaging substrate companies such as Japan's Ibiden and Shinko, as well as major competitors including Unimicron, Samsung Electro-Mechanics, and Kinsus, have been announcing expansions of their operating factories in 2023 and beyond," adding, "This suggests that the industry supply shortage will persist for at least the next several years."

LG Innotek announced after the market closed yesterday that it will invest 41.3 billion KRW over three years from this month until April 2024 to establish an FC-BGA mass production line. Although this investment was already known, the announcement officially formalized the business entry.

Since 2020, LG Innotek has withdrawn from low value-added HDI substrates within its substrate materials division and has been strengthening its capabilities in the high value-added packaging substrate business. The investment adds FC-BGA to the existing production lineup of FC-CSP, CSP, and SiP (AiP). Researcher Cho said, "This investment is the first phase, and we expect additional follow-up investments," forecasting, "There will likely be trillion-KRW scale investment plans similar to major competitors like Samsung Electro-Mechanics."

This content was produced with the assistance of AI translation services.