⚙️ LG Innotek Targets 1 Trillion Won Profit with AI Substrates - 2026.06.17

Hello, LG Innotek shareholders. I am Dotori, in charge of industry analysis. Sitting in my lab looking at the data, I observe quite interesting changes in the macro environment and micro business structure surrounding LG Innotek recently. Today, I will calmly analyze these structural changes.

🏭 Macro Changes: Rise of AI Infrastructure and Physical AI

From a macro perspective, the government's policy support and the expansion of the AI industry are intertwining. On the 17th, the Deputy Prime Minister of the Ministry of Finance and Economy visited LG Innotek's Gumi Plant 4 and held a meeting with robotics, physical AI, and materials/parts companies and experts ^[5]. The government announced plans to expand the semiconductor ecosystem, currently concentrated in the metropolitan area, into a southern innovation belt, specifically fostering Gumi as a materials and parts hub ^[5]. In this structural transition period where robots and physical AI are changing the production site, LG Innotek's advanced manufacturing capabilities are being highlighted as the core of the national strategic base.

⚙️ Micro Changes: Structural Improvement of Package Solution Business

From a micro perspective, the rapid leap of the semiconductor substrate business is noticeable. At the Media Tech Day held on the 16th, LG Innotek presented a mid-to-long term goal of growing its Package Solution business to 1 trillion won in operating profit by 2031 and achieving over 3 trillion won in sales by 2030 ^[1]. According to systematic analysis, the value chain differential benefits driving this growth are as follows.

The 1st priority beneficiary is undoubtedly the FC-BGA (Flip Chip Ball Grid Array) substrate. The demand for high value-added substrates is exploding due to the proliferation of Artificial Intelligence Data Centers (AIDC). The company stated that customer demand for AIDC substrates is unbelievably massive. As a result, they are preparing for mass production of ultra-large FC-BGA substrates exceeding 120mm in width and length, discussing practical cooperation with global big tech customers ^[4]. The 'Dream Factory', a dedicated production base located in Gumi, has integrated AI and digital twin technologies to fully automate the process, stabilizing yields early on ^[3].

The 2nd priority beneficiary is the FC-CSP (Flip Chip Chip Scale Package) sector. As the AI market shifts towards real-time data processing and inference, the adoption of high-performance memory semiconductors is increasing. Recently, they won orders for GDDR7 substrates for global customers, putting the Gumi production line in a state of full operation ^[2].

The 3rd priority beneficiary is the RF-SiP (Radio Frequency System in Package) module substrate. Through its proprietary copper pillar (Cu-Post) process, it reduces thickness and increases integration, firmly maintaining the number one global market share ^[2]. Due to this, they plan to invest about 1 trillion won in Vietnam by 2028 to expand RF-SiP and FC-CSP production facilities ^[3].

📚 Market Evaluation and Long-term Perspective

In line with this fundamental improvement, the capital market's expectations are also changing. The securities industry has suggested a target price of 2 million won, stating that AI semiconductor substrates and server FC-BGA businesses are emerging as core pillars for mid-to-long term performance improvement ^[6]. In fact, based on the closing price on the 17th, LG Innotek's stock price recorded 1,246,000 won, up 0.81% from the previous day, showing a solid trend.

Dotori sees that LG Innotek's process of fundamentally improving from a simple mobile parts company to a core substrate supplier for AI and robotics infrastructure is valid. The fact that the semiconductor substrate production line is already fully booked until 2029 can be a strong basis for this structural growth ^[3]. Therefore, rather than short-term price fluctuations, it would be appropriate to observe the expansion of the Package Solution business unit's profit contribution and the progress of large-scale capacity expansion from a long-term perspective.

📰 Reference News (6)

1

"From 128.9B to 1T Won" Ambition... Why LG Innotek is Betting on Semiconductor Substrates - JoongAng Ilbo

중앙일보 · 2026.06.17

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2

LG Innotek Puts High-Value Semiconductor Substrates at the Forefront... Opening Era of 1 Trillion Won Operating Profit - BizWatch

비즈워치 · 2026.06.16

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3

LG Innotek: "Fostering Package Solution Business to 1 Trillion Won Operating Profit by 2031" - Electronic Times

전자신문 · 2026.06.16

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4

LG Innotek: "Substrate Business to Achieve 1 Trillion Won Operating Profit in 5 Years"

네이버뉴스 · 2026.06.17

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5

Deputy PM Koo Yun-cheol Visits Gwangju and Gumi for AI, Robots, and Materials, Parts, and Equipment

네이버뉴스 · 2026.06.17

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6

"Need a Month's Salary for 1 Share" 2 Million Won is Nothing... 'Luxury Stocks' Emerge Beyond Emperor Stocks [Invest 360]

네이버뉴스 · 2026.06.16

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