LG Innotek targets $647 million profit from substrates by 2031
LG Innotek aims for its package solution business, which produces semiconductor substrates, to generate USD 647 million in operating profit by 2031. That is nearly eight times the level reached in 2025, as the company pushes into substrates for AI memory and CPUs.
In 2025, the business recorded sales of approximately USD 1.11 billion, up 18% from USD 0.94 billion in 2024, while operating profit rose from USD 46 million to USD 83 million, according to a press release from LG Innotek. The unit accounted for only about 10% of the company's total sales, but nearly 20% of its operating profit. Within five years, LG Innotek expects its profit contribution to match that of the optical solution business, which includes the camera modules the company is best known for.
"Based on our differentiated technologies, we will swiftly expand our market share in the rapidly evolving semiconductor substrate market and nurture our package solution business into a core pillar that generates USD 647 million in operating profit by 2031," said Jeffrey Cho, Senior Vice President of the Package Solution Business Unit, at a Media Tech Day held at the company's headquarters in Magok, Seoul, in June.
The largest contributor to sales today is RF-SiP substrates for smartphones, where LG Innotek estimates it held 65% of the global market last year, based on the top five RF customers, and expects to reach around 80% this year. The company has strengthened its position by forming copper columns, so-called Cu-Posts, beneath the solder balls, allowing them to be placed closer together and reducing substrate thickness by nearly 20%. A next-generation version aims to narrow the spacing by a further 10%.
Growth is increasingly coming from AI. As inference gains ground, the use of memory such as GDDR in AI accelerators and servers is rising, and with it demand for the FC-CSP substrates used to package it. LG Innotek has previously supplied FC-CSP substrates mainly for mobile application processors.
"LG Innotek has recently secured orders from global semiconductor customers for FC-CSP substrates for GDDR7 memory. With a series of new orders for memory-type FC-CSP substrates, the semiconductor production lines at our Gumi plant are now operating at full capacity," said Jungho Hwang, Head of Package Solution Marketing Division.
To meet demand, the company plans to expand FC-CSP and RF-SiP production at a new plant in Vietnam.
In FC-BGA substrates, used for CPUs and GPUs in PCs, servers and vehicles, LG Innotek is a newcomer. It entered the market in 2022 and is building a dedicated production line of approximately 26,000 square metres at its Gumi 4 plant, acquired from LG Electronics. The company began mass-producing FC-BGA substrates for PC chipsets for a global big tech customer back in December 2024, and planned to start production of substrates for PC CPUs for the same customer in the third quarter. By 2028, it aims to move into high-end substrates for CPUs and GPUs in autonomous vehicles and AI servers, and it is reviewing further capacity expansion in South Korea.
