LG Innotek’s semiconductor substrate business is emerging as a key growth engine, with factories running at 80 percent of capacity as demand rises alongside the expansion of artificial intelligence infrastructure.
According to the company’s 2025 business report released Thursday, the average use rate of its semiconductor substrate lines reached 80.8 percent last year, up sharply from 63.2 percent in 2023 and 75.6 percent in 2024.
The rebound has driven strong growth in LG Innotek’s Package Solution division, which handles the substrate business. The unit’s operating profit surged 82 percent on-year to 128.9 billion won ($96 million) in 2025, while revenue rose 18 percent to 1.72 trillion won.
Though the division accounts for only 7.9 percent of total sales, it generated 19.4 percent of the company’s operating profit.
Analysts attribute the increase to growing demand for advanced semiconductor substrates, which are being used in a growing range of applications. Mobile substrates such as flip-chip chip-scale packages (FC-CSP) are increasingly used in advanced memory chips including GDDR7, broadening their market.
LG Innotek is also focusing on flip-chip ball grid array (FC-BGA) substrates — high-density components used in AI servers and data centers — as a new growth driver.
“Demand for semiconductor package substrates is expected to continue rising for the time being,” CEO Moon Hyuk-soo said earlier this year at the CES 2026 tech show in Las Vegas.
Moon added that the company’s substrate production lines are expected to soon approach maximum capacity, and that LG Innotek is reviewing options to expand production to meet rising demand.
Brokerage estimates suggest the package solution division’s revenue could reach 1.88 trillion won this year, with operating profit projected to climb to 181.8 billion won, supported by demand from AI and high-performance computing markets.
By Herald Business reporter Kim Hyun-il (joze@heraldcorp.com)
Edited by Korea Herald Buiness Desk Editor Lee Ji-yoon (jylee@heraldcorp.com)
The original Korean version of this story is available at:
jylee@heraldcorp.com
