LG Innotek to invest $408 million to upgrade chip factory

LG Innotek will invest 600 billion won ($408 million) into its factory in Gumi, North Gyeongsang, through December 2026 to ramp up its production capacity for chip substrates and camera modules. 

The investment, under a memorandum of understanding signed with Gumi's city government the same day, will fund the installation of new equipment for the production of camera modules and flip chip ball grid array (FC-BGA) packages, the component maker 40.79 percent owned by LG Electronics said in a statement on Tuesday.

LG Innotek said it had begun began producing FC-BGA chipsets for U.S. tech companies in December. 

The parts maker is best known for manufacturing camera modules for Apple’s iPhone but began diversifying its portfolio to produce FC-BGA semiconductor substrates in 2022. It also signed a 1.4 billion won investment MOU with Gumi in 2022 to invest in its FC-BGA production lines.

“Gumi is LG Innotek’s strategic point that acts as a fundamental of the company’s core business, and we plan to grow alongside the local society and other firms,” LG Innotek CEO Moon Hyuk-soo said in a press release.

“LG Innotek’s investment will act as an opportunity to revitalize Gumi’s local economy,” Gumi Mayor Kim Jang-ho said in a press release. “Gumi will be supporting a variety of ways for LG Innotek to form a win-win relationship with local society.”

BY CHO YONG-JUN [cho.yongjun1@joongang.co.kr]