LG Innotek's $1 Billion Semiconductor Substrate Plant in Hai Phong, Vietnam

2026-07-08

On June 4, 2026, LG Innotek, the electronic components manufacturer under South Korea's LG Group, signed a Memorandum of Understanding (MoU) with the Hai Phong City Government at the LG Science Park in Seoul, formally confirming its investment plan for its first overseas semiconductor substrate manufacturing facility. The plant will be developed by LG Innotek Vietnam Hai Phong Co., Ltd.

LG Innotek's $1 Billion Semiconductor Substrate Plant in Hai Phong, Vietnam

The total investment for this project amounts to approximately 1 trillion won (around $1 billion). The facility will cover an area of roughly 330,000 square meters and will focus on producing three categories of advanced semiconductor substrates: Radio Frequency System-in-Package (RF-SiP) substrates, Flip Chip Chip Scale Package (FC-CSP) substrates, and Flip Chip Ball Grid Array (FC-BGA) substrates.

According to the plan, construction of the plant is scheduled to commence in the third quarter of 2026 in Hai Phong City, with trial operations expected to begin in the third quarter of 2027 and full-scale mass production targeted for the third quarter of 2028. Upon completion, this facility will become LG Innotek's second-largest semiconductor substrate production base following its Gumi plant in South Korea, as well as its first-ever overseas semiconductor substrate manufacturing site.

LG Innotek's Dual-Track Strategy

This investment represents a critical move in LG Innotek's "dual-track production strategy." Under this strategy, the existing plant in Gumi, Gyeongsangbuk-do, South Korea, will serve as the Mother Factory, concentrating on new technology research and development, new product introduction, and high-value-added product manufacturing. The Hai Phong facility, in contrast, is positioned as a large-scale mass production base for general-purpose semiconductor substrates, taking on standardized, volume-oriented production tasks. This division-of-labor model has already been successfully validated in LG Innotek's optical solutions business (camera modules).

Market Drivers and Capacity Demand

This capacity expansion directly responds to the structural growth of the global semiconductor substrate market. Demand for RF-SiP substrates continues to climb alongside the proliferation of 5G and the anticipated deployment of 6G. FC-CSP substrates benefit from the robust demand for low-power, high-performance chips driven by On-Device AI. FC-BGA substrates, meanwhile, are in short supply due to accelerated AI infrastructure investments by global technology giants.

At present, the semiconductor substrate production lines at LG Innotek's Gumi plant are operating near full capacity, making capacity expansion imperative. LG Innotek had previously signed an additional investment agreement worth 600 billion won with Gumi City in March 2025 to expand FC-BGA capacity and high-end camera module facilities.

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