Samsung Electro-Mechanics Substrate in Apple Products... Rising Expectations for Securing 'Big-Spending' Customers

Samsung Electro-Mechanics Invests 1.6 Trillion KRW in FC-BGA Business
Focus on Customer Lineup

[Asia Economy Reporter Park Sun-mi] As Apple is expected to unveil a new product lineup featuring its independently designed M2 processor within the first half of the year, attention is focused on whether Samsung Electro-Mechanics is the only domestic company supplying semiconductor substrates to Apple. Apple's self-developed M series processors, based on ARM architecture and optimized for mobile, offer advantages in power efficiency, size, and performance, and are expected to be installed in all of Apple's future laptops and tablets.

On the 23rd, the electronics and securities industries are weighing the possibility that Samsung Electro-Mechanics, along with Japan's Ibiden and Taiwan's Unimicron, will supply the semiconductor package substrate (FC-BGA) used in the M2 processor. As Samsung Electro-Mechanics and LG Innotek are both expanding investments in next-generation semiconductor substrates, rumors have spread that Apple will source substrates from Korean companies, with the market leaning toward Samsung Electro-Mechanics as the likely supplier rather than the latecomer LG Innotek.

FC-BGA is a substrate that connects semiconductor chips to the main substrate and is considered a core part of the semiconductor post-processing packaging work. It is known to be the most technically challenging among package substrates.

Samsung Electro-Mechanics has stated that it cannot confirm customer-related information. However, the industry views Samsung Electro-Mechanics' semiconductor substrate production technology and revenue level as the only ones in Korea comparable to Japanese and Taiwanese companies. It is highly likely that Samsung Electro-Mechanics, which has already participated in supplying substrates for Apple's M1 processor, has been selected again as a substrate supplier for the M2. Samsung Electro-Mechanics' FC-BGA is already positioned at the top tier, being used in high-performance laptops.

Kwon Sung-ryul, an analyst at DB Financial Investment, said, "Apple is developing at least nine Mac PCs equipped with the M2. Samsung Electro-Mechanics appears to be involved in the substrate segment of Apple's M2 processor. Since Samsung Electro-Mechanics already supplies FC-BGA to several CPU and GPU companies and supplied substrates for the previous M1, significant achievements are expected in the future."

Samsung Electro-Mechanics' consecutive supply of FC-BGA to Apple is positively evaluated not only because it is rapidly establishing its market position but also because it has laid the groundwork for expanding investments through stable customer acquisition. The recent aggressive increase in FC-BGA business investments by Samsung Electro-Mechanics is also analyzed as a measure reflecting the diversification of its customer base to include Apple and others.

Kim Ji-san, an analyst at Kiwoom Securities, explained, "Samsung Electro-Mechanics is conducting large-scale investments of around 1.6 trillion KRW in the FC-BGA business along with product advancement. Through additional investments in the Busan plant, it is preparing for advancement for server use. Server-grade FC-BGA is expected to be mass-produced within the year, and the server-grade price is about 5 to 10 times that of PC-grade." He added, "Samsung Electro-Mechanics' FC-BGA business revenue this year is expected to increase by 27% from the previous year to 740 billion KRW and could leap to around 1.3 trillion KRW in 2024. Considering tight supply conditions, an operating profit margin of over 20% can also be maintained."

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