Samsung Electro-Mechanics will invest 4.27 trillion won to increase production capacity for semiconductor substrates used in AI servers. Samsung Electro-Mechanics said on Sept. 28 it confirmed an investment plan to expand the plant at its Sejong site. It is the largest investment ever for a single product. Equipment investment will run through May 2028, and new production lines will begin operating in September 2028 to start mass production.

FCBGA is a high-density semiconductor substrate that connects high-performance chips such as AI accelerators, GPUs and CPUs to the motherboard to supply electrical signals and power, and it determines the performance and stability of AI semiconductors. Demand for FCBGA has risen steeply as the AI server and high-performance computing (HPC) markets have grown. Samsung Electro-Mechanics decided to proceed with the investment based on mid- to long-term cooperation with global big tech customers. Customers will provide investment funds and guarantee mid- to long-term volumes.

Risks tied to new capital expenditure will be resolved with customer funds. With volumes already secured and plant utilisation guaranteed, the company explained that the burden of operating expenses will also be reduced. Samsung Electro-Mechanics expects stable demand to serve as a foothold for strengthening competitiveness in its FCBGA business.

The Sejong site is Samsung Electro-Mechanics' domestic production base for semiconductor substrates. The company plans to position the site as a key base for mass production of high value-added and high-difficulty products and to respond in advance to rising demand for AI and server substrates. The expanded capacity targets demand for high value-added substrates in high-growth markets such as AI servers, HPC and automotive electronics. The plan is to respond to customers' requests for expanded mid- to long-term volumes and also raise production efficiency and supply stability.

The company sees investment in AI infrastructure continuing for the next 2 to 3 years. It judges that demand for semiconductor substrates will expand along with growth in the AI market. FCBGA is evolving faster toward larger-area, higher-layer and higher-density structures. Samsung Electro-Mechanics believes that mid- to long-term demand will be maintained as substrate technology becomes more advanced.

Samsung Electro-Mechanics CEO Jang Deok-hyun (장덕현) said, "As the AI and high-performance computing markets grow rapidly, high value-added semiconductor substrates are becoming more important as a key component that determines semiconductor performance and supply chain stability." He said, "Based on differentiated substrate technological capabilities and stable supply capacity, Samsung Electro-Mechanics will be able to strengthen competitiveness in its FCBGA business in high-growth markets such as AI, servers and automotive electronics."