LG Innotek to build $1 bln semiconductor substrate plant in northern Vietnam

South Korea's LG Innotek will spend $1 billion to build a semiconductor package substrate manufacturing plant in Hai Phong city, with mass production scheduled to begin in the third quarter of 2028, according to local authorities.

The Standing Committee of the Hai Phong Party Committee has just approved the investment policy for LG Innotek Hai Phong Semiconductor Package Substrate Plant.

The project will be developed by LG Innotek Vietnam Hai Phong Co., Ltd. and located on 32 hectares in the Nam Dinh Vu Industrial Park within Dinh Vu-Cat Hai Economic Zone.

According to the city's latest timeline, construction is expected to begin in Q3/2026, trial operations will start in Q3/2027, and commercial production is scheduled for Q3/2028.

Earlier, LG Innotek signed a memorandum of understanding with Hai Phong on June 4 to expand its semiconductor substrate business in the city. At the time, the company said construction would begin in July 2026 and be completed in May 2027, but did not disclose the investment value.

The city's announcement on July 3 marked the first official confirmation that the project would require an investment of $1 billion and provided additional details on the trial operation and mass production schedule.

First project in Hai Phong's Free Trade Zone

Hai Phong's Party chief Le Ngoc Chau said the investment is the first project to be implemented within the city's Free Trade Zone and is in a sector that the city has identified as a priority for investment attraction.

The city's Party leaders instructed the People's Committee and the Hai Phong Economic Zone Management Board to complete necessary procedural steps so as construction on the project can commence in Q3/2026.

In addition to manufacturing semiconductor package substrates, the project will include facilities for leasing factories, offices, warehouses and other completed buildings to support industrial and commercial activities.

The new facility in Nam Dinh Vu will operate separately from LG Innotek's existing camera module manufacturing complex in Trang Due Industrial Park.

LG Innotek Vietnam Hai Phong was established in September 2016 with an initial investment of $550 million for its V1 plant. The company has since completed its V3 plant in Trang Due, raising total registered investment in the existing manufacturing complex to more than $2 billion.

Expansion into semiconductor substrates

The new investment will expand LG Innotek's operations in Hai Phong beyond camera modules into materials and components used in semiconductor packaging.

According to the company, the plant will manufacture three main product categories: RF-SiP, FC-CSP and FC-BGA substrates.

RF-SiP substrates integrate radio frequency chips, logic chips and passive components into a single package and are primarily used in wireless communication modules for smartphones and wearable devices.

LG Innotek expects demand to increase as 5G adoption expands and future 6G deployment drives next-generation communications.

FC-CSP substrates are used to connect application processors, baseband chips, memory chips and other high-performance semiconductors to the main circuit board in mobile devices.

The company expects wider adoption of on-device artificial intelligence to boost demand for high-performance, low-power semiconductor solutions, supporting growth in premium application processor and memory chip substrates.

FC-BGA substrates, a higher value-added product, are widely used in CPUs, GPUs, servers, networking equipment and data processing systems. LG Innotek said growing investment in AI infrastructure by global technology companies is increasing both demand and technical requirements for these products.

LG Innotek plans to operate its semiconductor substrate business through a dual-manufacturing model. Its Gumi facility in South Korea will serve as the lead plant for advanced technologies, new product development and high-value products, while the Hai Phong facility will focus on high-volume production of mainstream semiconductor substrates.

The company said it selected Hai Phong because of its existing manufacturing experience in the city, available industrial infrastructure, proximity to semiconductor packaging and testing companies, and competitive production costs.

LG Innotek aims to increase revenue from its semiconductor packaging solutions business to more than 3 trillion won ($1.94 billion) by 2030. The $1 billion investment in Hai Phong forms part of its capacity expansion strategy as production lines at its Gumi substrate facilities are approaching full utilization.