Samsung Electro-Mechanics (Semco) is poised to step into the server package substrate sector with plans to build new production lines for high-end ABF substrates in South Korea and Southeast Asia to meet growing demand for server applications, according to industry sources.
Semco is more focused on BT-based FCCSP, WBCSP and SiP substrate production, while being among the ABF-based FCBGA substrate suppliers of major PC processor vendors. Semco is looking to enhance its ABF substrate offerings to include high-end ones for server processors, the sources said.
The supply of high-end ABF substrates for server applications has been tight, already encouraging suppliers including Japan-based Ibiden and Electric, Austria-headquartered AT&S, and Taiwan-based Unimicron Technology to build additional production capacities to satisfy the strong demand, the sources indicated.
Semco, on the other hand, has taken a cautious approach toward expanding ABF substrate capacity, the sources said. Rather, Semco has more aggressive expansion plans for high-end BT substrates such as antenna-in-package (AiP) substrates.
Semco remains competitive in its ABF substrate manufacture. In addition to being a major supplier of both Intel and AMD for PC processors, Semco has landed orders for processing Apple's Mac processors, the sources noted.
Semco's entry into the server package substrate segment will further boost its share of the global IC substrate market, according to the sources.
When disclosing its earnings results for the first quarter of 2022, Semco said that it is "preparing to become the first Korean company to mass-produce high value server package substrates in the second half of the year."
Semco in December 2021 announced plans to invest a total of US$850 million in the establishment of FCBGA production facilities and infrastructure for its Vietnam-based production plant. The investment will be executed in phases until 2023. Semco also has a plant in the Philippines.
In South Korea, Semco operates plants in Busan, Sejong and Suwon. Semco reportedly also plans to expand its Busan site for additional FCBGA substrate output for KRW300 billion (US$245 million).
