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Chang Duck-hyun, President and CEO of Samsung Electro-Mechanics, speaks at the regular general shareholders' meeting held in March this year. / Yonhap News

Samsung Electro-Mechanics will invest over 4 trillion won to meet market demand for flip-chip ball grid arrays (FCBGA) used in artificial intelligence (AI) servers. This represents the company's largest single-product investment to date, signaling that President Chang Duckhyun's push to restructure operations around high-value AI server components is gaining momentum.

On the 28th, Samsung Electro-Mechanics announced that it decided on a 4.27 trillion won plant expansion investment to boost FCBGA production capacity at its Sejong campus. The investment spans from this month through May 2028, with plans to begin commercial mass production on the new line in September that same year.

FCBGA is a high-density semiconductor substrate that links high-performance chips, including AI accelerators, GPUs, and CPUs, to the mainboard while providing electrical signals and power. Serving as a critical component determining the performance and stability of AI semiconductors, it is increasingly sophisticated, featuring broader surface areas and higher layer counts than conventional substrates.

Designating FCBGA as a fresh growth engine, Samsung Electro-Mechanics has maintained trillion-won investments since 2021. In 2022, the company became the first in South Korea to begin mass-producing server-grade FCBGA. Samsung Electro-Mechanics aims to raise the share of high-value FCBGA to over 50% within this year.

The strategy is already bolstering earnings. Last year, Samsung Electro-Mechanics posted record results with 11.3145 trillion won in revenue and 913.3 billion won in operating profit by aggressively meeting demand for high-value FCBGA. Driven by FCBGA sales, package solution revenue alone reached 771.6 billion won in the second quarter of this year, jumping 37% year over year.

This latest move aligns directly with the business restructuring led by Chang. At the regular general shareholders' meeting in March, Chang declared intentions to pivot the company's business portfolio around AI servers, automotive electronics, and humanoids. Addressing AI server substrate output at the time, Chang noted that customer demand exceeded current capacity by more than 50%, adding that the company would respond by boosting productivity and yields while planning supplementary investments and facility expansions.

Building on this expansion, Samsung Electro-Mechanics intends to target high-value substrate demand more assertively. Because the initiative is underpinned by mid- to long-term partnerships with global tech giants, it secures both client funding support and guaranteed order volumes. Consequently, securing stable demand is anticipated to solidify the company's competitive edge.

Chang said, "With rapid growth across the AI and high-performance computing markets, high-value chip substrates are gaining prominence as core components dictating chip performance and supply chain reliability." He added, "Leveraging our differentiated substrate technology and reliable supply capabilities, we will sharpen our FCBGA competitiveness across high-growth sectors including AI, servers, and automotive components."

                                                                                                               Choi In-kyu