Samsung Electro-Mechanics is spending about $5 billion expanding advanced semiconductor substrate production after customers agreed to help bankroll the capacity increase.
According to DigiTimes the Samsung subsidiary will pour the cash into FCBGA production in South Korea and Vietnam as demand for high-performance processors continues to climb.
The programme totals roughly $5 billion, with about $3.14 billion going to Samsung Electro-Mechanics’ Sejong facility in South Korea and $1.85 billion earmarked for Vietnam. What makes the investment slightly less like throwing several billion dollars at the AI gold rush is that Samsung has secured financial support from global customers.
Those customers have committed to mid-to-long-term purchase volumes, giving Samsung greater certainty that its shiny new production lines will have something useful to do once they are switched on.
Customer funding reduces the capital expenditure risk, while guaranteed volumes should keep utilisation rates healthier and reduce the burden of operating costs.
The Sejong expansion will run from September 2026 until May 2028, with mass production scheduled to start in September 2028. Samsung said it is its largest investment in a single product.
Its Vietnamese operation will take longer, with construction and production capacity scheduled to come online by June 2030. The factories will produce FCBGA, or flip-chip ball grid array, substrates. These connect processors, including CPUs, GPUs and AI accelerators, to the mainboard while carrying electrical signals and power.
Demand is increasing as processors become larger, more complicated and considerably more power-hungry. Substrate makers are being pushed towards larger boards with more layers and greater integration. Samsung expects investment in AI infrastructure to remain strong for the next two to three years, driving further demand for high-end FCBGA products used in servers and high-performance computing.
The company intends to use Sejong as its main production hub for demanding, high-value substrates. Vietnam will handle larger global volumes and provide additional manufacturing capacity.
Samsung Electro-Mechanics president Chang Duckhyun said: “As the AI and high-performance computing markets grow rapidly, high-value-added semiconductor substrates are becoming increasingly important as key components that determine semiconductor performance and supply chain stability.”
He added: “Based on differentiated substrate technology and stable supply capabilities, Samsung Electro-Mechanics will be able to strengthen the competitiveness of its FCBGA business in high-growth markets such as AI servers and automotive electronics.”
