Samsung Electro-Mechanics will invest a total of 6.78 trillion won in its Sejong plant in Korea and its Vietnam subsidiary to expand production capacity for high-performance semiconductor substrates used in artificial intelligence (AI) servers. The large-scale capital investment is aimed at responding to the growth of the AI server and high-performance computing (HPC) markets.

■ 4.27 Trillion Won for Sejong, 2.51 Trillion Won for Vietnam... Mass Production Targeted for 2028

On September 29, Samsung Electro-Mechanics announced a plan to invest 4.27 trillion won in the Sejong plant and about 2.51 trillion won in its Vietnam subsidiary to expand FCBGA (flip-chip ball grid array) production facilities. The 4.27 trillion won allocated to the Sejong plant is the largest investment Samsung Electro-Mechanics has ever made in a single product.

The investment period runs from September 2026 to May 2028, with mass production at the new facilities scheduled to begin in September 2028. Equipment investment for FCBGA plant expansion, totaling about 2.51 trillion won, will also proceed at the Vietnam subsidiary, with a goal of completing construction and starting operations by June 2030.

■ FCBGA, a Key Component of AI Semiconductors... Competition in Large-Area, Multilayer Technology

At the center of this investment is FCBGA, whose importance is growing in the AI semiconductor market. FCBGA is a substrate that connects high-performance semiconductors such as AI accelerators, graphics processing units (GPUs), and central processing units (CPUs) to the motherboard. It delivers electrical signals and power to semiconductors and is regarded as a key component affecting the operation and stability of high-performance chips.

In particular, as AI semiconductors evolve toward rapidly processing massive amounts of data, substrates are also required to meet higher technological standards. As chip integration increases, substrates are undergoing 'large-area, multilayer' development, with bigger surfaces and more complex circuit layers. Samsung Electro-Mechanics decided to expand its production facilities to respond to these technological changes and growing AI infrastructure investment, and expects AI infrastructure investment to continue for the next two to three years.

■ Financial Support from Global Customers... Easing CAPEX and OPEX Burdens

Notably, the expansion is being pursued based on mid- to long-term cooperation with global customers. According to Samsung Electro-Mechanics, global customers will provide the funds needed for the new capital investment while securing mid- to long-term volumes. Through this arrangement, the company aims to reduce the capital expenditure (CAPEX) burden associated with large-scale facility investment and secure a demand base to support facility utilization rates. Customers' mid- to long-term volume commitments were also cited as a factor easing the operating expenses (OPEX) needed to run production facilities.

Samsung Electro-Mechanics plans to expand its domestic and overseas production bases to respond not only to AI servers but also to rising demand for high-value-added semiconductor substrates in HPC and automotive electronics. Samsung Electro-Mechanics President Chang Duck-hyun expressed his commitment to strengthening the competitiveness of the FCBGA business based on differentiated substrate technology.

■ Stock Price Trends and Upcoming Schedule

Samsung Electro-Mechanics' stock closed at 1,559,000 won in after-hours trading on the 8th, down 45,000 won (-2.81%) from the previous day. The large-scale investment plan was announced on September 29, and no direct causal relationship has been confirmed between the announcement and the stock price decline on October 8.

Looking ahead, key milestones for Samsung Electro-Mechanics' FCBGA business include the start of mass production at the Sejong plant in 2028 and the target of operating the Vietnam facility by 2030. Attention is focused on how the production capacity expansion, pursued in cooperation with global customers, will translate into actual business results.

[Investment schedules and business outlook are subject to change, and this article is not intended to recommend investment in any specific stock. The final judgment and responsibility for stock investments rest with the investor. This article was written with the assistance of AI.]