Samsung will invest nearly $5 billion in components for AI chips

Samsung Electro-Mechanics, a manufacturer of electronic components of the Samsung group, is investing 6.78 trillion won - about $5 billion - in expanding production of FCBGA semiconductor substrates for AI servers and high-performance computing. New facilities will appear in South Korea and Vietnam.

The largest part of the investment - 4.27 trillion won, or about $3.2 billion - the company will direct to the plant in South Korea's Sejong. The investment program will run from September 2026 to May 2028, and the start of mass production is planned for September 2028.

Another 2.51 trillion won, or about $1.85 billion, Samsung Electro-Mechanics will invest in expanding the production complex in Vietnam. The company plans to build additional facilities there for the output of semiconductor substrates. According to Samsung's official schedule, construction and launch of the expanded site must be completed by June 2030.

FCBGA are multi-layer substrates through which high-performance processors, GPUs and AI accelerators are connected to the motherboard and receive power. With the growth in size and complexity of AI chips, manufacturers need increasingly larger substrates with more layers and denser electrical connections.

Samsung Electro-Mechanics expects that investments in AI infrastructure will remain high for at least the next two to three years. The company plans to use the new facilities for components of AI servers, high-performance computing systems and automotive electronics.

The expansion of production is partially supported by global technology and semiconductor customers of Samsung Electro-Mechanics. The company reported that partners provide financing for capital expenditures and assume medium- and long-term purchase commitments. This should reduce the risks of the multi-billion-dollar expansion and ensure utilization of the new production lines.

The investment in Sejong will be the largest in the history of Samsung Electro-Mechanics into a single product type. The plant is to become one of the company's main production hubs for high-performance FCBGA, while the Vietnamese site will strengthen its overseas production capabilities.

Demand for such components is growing rapidly along with the construction of data centers and the release of artificial intelligence accelerators. The company already produces FCBGA for servers, and previously reported that demand for high-performance substrates for server and AI segments exceeds its current production capabilities.

Samsung Electro-Mechanics announced the key parameters of the investment at the end of September, and on October 7 Nikkei Asia drew attention to the scale of the program and the growing role of Vietnam in the supply chain of components for AI servers.

Based on materials from: Samsung Electro-Mechanics, The Investor