[THE INVESTOR] Samsung Electro-Mechanics, an electronic parts affiliate of Samsung Group, is preparing to dive into the integrated circuit packaging industry, according to news reports on Monday.

Joining hands with Samsung Electronics, a chip maker, the electronic components firm will likely plan to win new supply contracts of chips for smartphone makers, including U.S.-based Apple.

Samsung Electro-Mechanics will transform Samsung Display’s two liquid crystal display assembly lines in Cheonnan into ones for IC packaging, reported Etnews, a local electronics news outlet.

IC packaging is a part of the last phase in manufacturing semiconductors. It involves encapsulating semiconductor materials in a case to prevent damage and corrosion.

The Samsung Group affiliate will package power management ICs, which control the flow of electricity, by utilizing Fan-out Wafer Level Package (FoWLP) technology

Such technology is said to have played a core role in Taiwanese chip maker TSMC winning a deal to supply its chips for Apple’s next flagship smartphone. It enables chip makers to pack multiple chips in one package, a technology often dubbed as “system in package.”

The workforces of Samsung Electronics’ system LSI -- a division in charge of producing non-memory chips -- and Samsung Electro-Mechanics will join the project to launch the IC packing business.

Following a series of tests, the IC packaging factories will go into full operation in the first half of next year.

By Kim Young-won (wone0102@heraldcorp.com)