On September 28, 2026, the board of Samsung Electro-Mechanics approved a capital expenditure plan totaling KRW 4.27 trillion (about US$4.4 billion) to expand its FC-BGA packaging substrate production facility in Sejong, South Korea.

The investment period begins September 28, 2026 and runs through May 31, 2028, a construction period of about 20 months. New production lines are scheduled to enter mass production in September 2028. The existing Sejong plant mainly produces standard BGA substrates; this expansion will shift its line focus to higher-value server FC-BGA products. On the same day, Samsung Electro-Mechanics also disclosed an additional KRW 2.51 trillion investment through its Vietnamese subsidiary to expand packaging substrate capacity, bringing total investment across the two sites to KRW 6.78 trillion.

Supply-Demand Imbalance

The direct driver of this expansion is surging substrate demand from explosive growth in the AI server market. Samsung Electro-Mechanics President Chang Duck-hyun previously stated publicly that demand for FC-BGA for servers and data centers has exceeded current capacity by more than 50%. FC-BGA is a high-density packaging substrate in which chips connect directly to upper-layer circuits of the carrier via micro-bumps, while the bottom solder ball array connects to the motherboard. It performs three functions—physical support, high-speed signal interconnection, and heat dissipation buffering—and is widely used in AI accelerators, GPUs, CPUs, and other high-performance chips.

TrendForce estimates that in 2026, capital expenditure by the world's top nine cloud service providers will grow about 90% year-on-year, while AI server shipments will rise nearly 31% year-on-year. The supply side, however, faces rigid constraints: in 2026, capacity at six major ABF substrate suppliers is fully booked, and overall lead times have stretched to 12–14 months. More severely, upstream ABF build-up film supply is highly concentrated, with 95% of global supply controlled by Japan's Ajinomoto. Part of its capacity has been booked through 2027, its new plant is scheduled to start production in 2032, and no large-scale new capacity will be released before 2032.

Competitive Landscape and Supply Assurance

Globally, the FC-BGA substrate market has long been dominated by Japanese manufacturers such as Ibiden and Shinko Electric, while Taiwan's Unimicron and Nan Ya PCB are also actively expanding capacity. High-end FC-BGA substrates are still mass-produced by Japanese and Taiwanese manufacturers, and mainland Chinese manufacturers lag their Taiwanese peers by about 3–5 years. Notably, Samsung Electro-Mechanics' investment is based on medium- and long-term cooperation arrangements with major global technology customers. Customers provide partial funding for the new facilities and lock in medium- to long-term order volumes, effectively reducing the financial and market absorption risks of the expansion.

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