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LG Innotek has announced plans to invest 600 billion won ($408 million) into its factory in Gumi, North Gyeongsang, through December 2026. This investment aims to significantly expand its production capacity for chip substrates and camera modules, Azernews reports, citing Korea JoongAng Daily.

The investment was formalized through a memorandum of understanding (MOU) signed with the city government of Gumi on Tuesday. The funds will be used to install new equipment for producing camera modules and flip chip ball grid array (FC-BGA) packages. LG Innotek, which is 40.79% owned by LG Electronics, revealed the details in a statement.

LG Innotek also confirmed that it began producing FC-BGA chipsets for U.S. tech companies in December 2023, marking a significant step in diversifying its portfolio. The company, which is primarily known for manufacturing camera modules for Apple’s iPhone, expanded into the semiconductor substrate market in 2022 with the production of FC-BGA chipsets. The company had previously signed a 1.4 billion won investment MOU with Gumi in 2022 to strengthen its FC-BGA production lines.

“Gumi is a strategic location for LG Innotek, serving as a foundation for our core business operations,” said LG Innotek CEO Moon Hyuk-soo in a press release. “We plan to grow alongside the local community and collaborate with other firms in the region.”

Gumi Mayor Kim Jang-ho also praised the investment, noting, “LG Innotek’s investment will provide a significant boost to Gumi’s local economy. The city is committed to supporting various initiatives that will foster a mutually beneficial relationship between LG Innotek and the local community.”

This investment signals LG Innotek's ambition to diversify and strengthen its position in the rapidly growing semiconductor market. The company's shift towards producing FC-BGA chipsets comes at a time when demand for advanced semiconductor packaging is soaring, particularly in industries like telecommunications, automotive, and consumer electronics.

LG Innotek’s expansion in Gumi aligns with the broader South Korean government's efforts to promote regional development and innovation in key technological sectors. Gumi, already a hub for high-tech manufacturing, is expected to benefit significantly from this investment as it strengthens its position as a key player in South Korea’s semiconductor and electronics industries.