LG Innotek production subsidiary in Hai Phong, Vietnam, marked its 10th anniversary on 1 October. The milestone matters less for what the plant has been than for what the company now wants it to become.
Over a decade, the site grew from 800 employees into LG Innotek largest global production base. The next phase is different: a pivot from camera modules into semiconductor substrates.
LG Innotek ten years in Hai Phong
The subsidiary was established in September 2016. It has since become the company’s biggest manufacturing hub, with 242,600 square metres of floor space and about 6,500 employees — 99% of them local, and 87% of key leadership roles localised.
The numbers are substantial. Cumulative investment has reached about US$1.9 billion (Vietnamese officials put total registered investment above US$2 billion), and cumulative revenue about US$25 billion. The plant recorded roughly US$4.1 billion in revenue in 2025.
For most of that decade, the business was camera modules. LG Innotek built northern Vietnam’s first ultra-precision cleanroom, won customer approval in September 2017 and started mass production.
The pivot to semiconductor substrates
Now the company is moving up the value chain. LG Innotek is developing semiconductor substrates — RF-SiP, FC-CSP and FC-BGA — as a core growth engine, targeting about US$740 million in operating profit from the package solutions business by 2031.
The centrepiece is a new plant in Hai Phong’s DEEP C zone, inside the city’s new Free Trade Zone. The investment is about US$1 billion, and it is LG Innotek’s first semiconductor production facility outside South Korea. Construction began in the third quarter of 2026, with pilot production in 2027 and mass production in 2028.
The company is running a dual-site model. Its Gumi plant in Korea is the “mother factory” for new technology and high-value products; Vietnam will mass-produce mainstream substrates.
Why FC-BGA matters
FC-BGA substrates connect high-performance chips to the board. The AI-server versions are more than four times the size of PC substrates and often exceed 20 layers, which makes them difficult to manufacture and a real bottleneck in the AI supply chain.
The market is concentrated. Unimicron, Ibiden, AT&S, Nan Ya PCB and Shinko Electric hold about 74% of production. Ibiden, which supplies Nvidia’s accelerators, has announced a roughly US$3 billion expansion.
Demand is outrunning supply. The server FC-BGA market was about US$1.29 billion in 2025 and is projected to reach US$3.67 billion by 2032. LG Innotek’s own Gumi lines went from 80.8% utilisation at the end of 2025 to 91.8% in the first quarter of 2026 — effectively full.
The margin problem it solves
The pivot is also a repair job. Camera modules are about 80% of LG Innotek’s revenue, but margins have collapsed. Operating margin fell from 7–8% in 2019–2021 to roughly 3% in 2024, as Apple pushed for lower prices and rivals gained share.
The wider financials tell the same story. LG Innotek’s 2025 revenue rose 3.3% to KRW 21.9 trillion, but operating profit fell 5.8% to KRW 665 billion. Its package solutions unit, by contrast, grew 27.6% year on year in the fourth quarter.
In other words, the substrates are where the growth and the margin now are.
What to watch
Three things will show whether the pivot works. Whether the Hai Phong substrate plant hits its 2028 mass-production date. Whether LG Innotek converts the second-phase FC-BGA talks with customers into a firm AI-server line. And whether it can win enough of the substrate market to offset the camera-module squeeze that made the move necessary.
A 10th anniversary is a backward glance. LG Innotek’s is really a statement about the next decade.
Editor’s Note
Sources: LG Innotek’s release of 5 October 2026; LG Innotek’s Q4 and full-year 2025 results; Vietnamese and Korean trade coverage (Vietnam News, The Investor, DEEP C, The Elec, Seoul Economic Daily, Electronic Times); LG Innotek’s investment filings with Hai Phong; and FC-BGA market research from QY Research, Techno Systems Research and JMS. Investment figures, product plans and timelines are as stated by LG Innotek or by Vietnamese authorities; the release’s “completion in May 2027” refers to the building, with mass production scheduled for 2028. TechRecast has not independently verified them. This article is not investment advice.