LG Innotek will invest 100 billion won in its Gwangju plant. LG Innotek said on Tuesday it signed an investment agreement, or MOU, with Gwangju for a factory expansion. The company plans to use the funds to expand the Gwangju plant to grow new businesses.

LG Innotek's Gwangju plant was established in April 1985. About 900 employees currently work there. As a key production base for its mobility solutions business, it produces in-vehicle communications, lighting and camera modules.

The new factory is scheduled to be completed in December this year. An additional production line for vehicle application processor, or AP, modules will be installed. After completion, the total floor area of LG Innotek's Gwangju plant will reach 97,000 square metres. Vehicle AP modules are a new business area LG Innotek launched last year.

Vehicle AP modules are a key component that serves as a vehicle's brain, like a computer's CPU. Installed inside vehicles, they are used to integrate and control automotive electronic systems such as advanced driver assistance systems, or ADAS, and digital cockpits. LG Innotek has been supplying vehicle AP modules to global semiconductor companies since late last year.

With the development of connected cars such as autonomous driving, the global market for vehicle AP modules is expected to grow 22 percent each year. But the number of producers remains very small. LG Innotek plans to quickly secure the market by leveraging differentiated technology and its mobility solutions business capabilities.

Gwangju Mayor Ki-jung Kang said, "LG Innotek's investment is very meaningful from the perspective of balanced regional development through non-capital-area and local investment." He said he expects the investment to serve as a catalyst for Gwangju's push to foster future vehicle materials, parts and equipment industries, and added the city will actively support the project to help energise the local economy, including through new job creation.

CEO Hyuk-soo Moon said, "Since its completion in 1985, the Gwangju plant has played a pivotal role as the 'mother factory' of the mobility solutions business, LG Innotek's growth engine." He said that as a strategic hub that underpins its core business, the company will do its best to grow together with the local community and partner companies in Gwangju and to create outstanding value for customers.

In March last year, the company also signed an investment agreement, or MOU, worth 600 billion won with North Gyeongsang Province and the city of Gumi in North Gyeongsang Province. At its Gumi plant, it plans to install new equipment to expand mass production lines for flip-chip ball grid array, or FC-BGA, and to produce high value-added camera modules.