LG Innotek Rides AI Boom with Semiconductor Substrate Expansion
LG Innotek is experiencing significant growth in its semiconductor substrate business, fueled by the escalating demand for artificial intelligence (AI) infrastructure. The company’s factories are currently operating at 80 percent capacity, a substantial increase from previous years, as it supplies critical components to major technology companies.
Strong Growth in Package Solution Division
According to LG Innotek’s 2025 business report, the average utilization rate of its semiconductor substrate lines reached 80.8 percent in 2025, up from 63.2 percent in 2023 and 75.6 percent in 2024. This surge in production has translated into robust financial performance for the company’s Package Solution division, which handles the substrate business.
The division’s operating profit increased by 82 percent year-over-year to 128.9 billion won ($96 million) in 2025, while revenue rose 18 percent to 1.72 trillion won. Despite representing only 7.9 percent of total sales, the Package Solution division contributes a significant 19.4 percent of LG Innotek’s overall operating profit.
Demand for Advanced Substrates
Analysts attribute this growth to the increasing demand for advanced semiconductor substrates used in a wide range of applications. Mobile substrates, such as flip-chip chip-scale packages (FC-CSP), are gaining traction in advanced memory chips like GDDR7, expanding their market reach.
LG Innotek is particularly focused on flip-chip ball grid array (FC-BGA) substrates – high-density components essential for AI servers and data centers – as a key driver of future growth. CEO Moon Hyuk-soo highlighted the company’s strong position in this market during CES 2026 in Las Vegas, stating that substrate production lines are nearing maximum capacity and that expansion options are being evaluated to meet rising demand. Korea Herald
Expanding Production Capacity
Brokerage estimates project the Package Solution division’s revenue to reach 1.88 trillion won this year, with operating profit climbing to 181.8 billion won, supported by demand from the AI and high-performance computing sectors.
AI-Driven Quality Control
LG Innotek is also leveraging artificial intelligence to improve its manufacturing processes. In October 2024, the company announced the development and implementation of an AI-based inspection system for incoming raw materials. LG Corp This system is designed to detect defects at the point of receipt, preventing the use of substandard materials in production. The technology, applied to both RF-SiP and FC-BGA substrates, reduces defect analysis time by up to 90 percent, analyzing raw material defects in as little as one minute. LG Innotek
Addressing Reliance on Apple
While experiencing growth in the AI sector, LG Innotek continues to address its reliance on Apple, which currently accounts for 70% of its sales. Korea Economic Daily The iPhone maker has been reducing its purchases of 3D sensing modules from LG Innotek as it diversifies its supply chain, particularly into Taiwan.