SEJONG -- With the increasing demand for next-generation semiconductors globally, Samsung Electro-Mechanics, an electronic parts manufacturing affiliate of Samsung Electronics, has been seeking to take the lead in the chip package substrate market.

On Thursday, Samsung invited a group of reporters to its manufacturing site in Sejong, where a new plant for chip package substrates, the fifth of its kind there, is being built to be completed by May next year.

"For next-generation chip packages, a factory that can enable advanced technologies such as high multi-layering, miniaturization and embedding was necessary,” said Lim Sung-yong, executive vice president and head of package manufacturing at the Sejong site.

Located about 140 kilometers south of Seoul within the Myeonghak industrial complex in Sejong, the 175,000-square-meter site became operational back in 1991, starting with the production of multilayer boards for PCs. In the following years, the complex produced ball grid arrays, which are chip carriers used for integrated circuits, in 1997, ending the monopoly of Japanese producers.

The Sejong site, together with one in Busan, serves as the production base for Samsung’s chip package substrates, especially for mobile devices. Samsung has long maintained its leadership in the global flip-chip scale package market with mobile application processors manufactured at the Sejong site.

A semiconductor package substrate connects chips and the main board to transmit electrical signals and power, while protecting the chips from the external environment. For high-performance substrates, in particular, key technologies include microcircuit technology and microcircuit implementation.

While offering a tour around the production lines, Shim Kyu-hyun, the manufacturing technology team leader at the site, said, "Reducing noise through environmental management close to a semiconductor cleanroom is key to production."

"If the substrate is exposed anywhere during the process, the yield can be damaged or affected by foreign substances. How to manage it well can be said to be the key to the package substrate."

Lim touted Samsung's uniquely advanced embedding technology for producing chip package substrates, saying that the Sejong site was the only place to realize the technique.

The technology can embed passive components such as capacitors inside the board, instead of mounting them on the outside. Embedding of semiconductor chips into substrates has the advantage of reducing power loss by more than half by reducing the signal path length, and is advantageous for high-speed signal transmission, he said.

Samsung is betting big on its package substrate business for next-generation chips, despite its relatively small contribution to the group's overall profits, based on a rosy market outlook.

Based on its semi-annual report for the January-June period, the package unit's sales recorded 835 billion won ($638 million), accounting for 19.7 percent of the total for the company. The share of Samsung's BGA products in the global package substrate market also took up only 16 percent.

Shim highlighted that the semiconductor market is expected to reach $752 billion in 2027 with the rising demand for high-performance semiconductors. Together, the chip package substrate market is expected to grow at an annual rate of 10 percent from $10.6 billion in 2023 to $15.2 billion in 2027.

"Although the package substrate market is undergoing a slump at the moment, it is expected to revive in the first half of next year," he said. "We plan to continuously focus on producing substrates for mobile devices and expand our manufacturing business for the burgeoning market for electric vehicles."