Samsung eyeing expanded business ties with AMD, Intel

In this file photo, U.S. President Joe Biden, center, speaks in the Roosevelt Room of the White House during an April 12 virtual summit on the semiconductor shortage in Washington, D.C. AFP-Yonhap

By Kim Yoo-chul

Samsung Electro-Mechanics, a Samsung Group affiliate specializing in the manufacture of electronic and electrical components, is pushing to expand its collaborations with top-tier tech companies as global chip shortages are expected to continue well into next year.

The production of printed circuit boards (PCB), which is a strength of the Samsung unit, requires raw materials for circuit board fabrication and electronic parts for complete assembly. Mismatches in supply and demand for both components and materials are having a massive impact on the production of PCBs. Samsung Electro-Mechanics is responding to the shortage by boosting investments into PCB production.

Sources and officials said Monday that Samsung Electro plans to invest around 1 trillion won into its manufacturing facility in Vietnam to increase production of flip chip ball grid array (FC-BGA) circuit boards ― a type of PCB package assembled around advanced, single-unit laminate or ceramic substrates.

"Samsung Electro-Mechanics' management reached a broad consensus for more investments in FC-BGAs," a source said. "However, no final decision has been made regarding the location of its new investment, while there's a smaller possibility of the Samsung affiliate choosing South Korea as the location for the new investment," a source said, adding that the company plans to stop producing legacy Rigid Flex PCBs at its plant in Vietnam.

Samsung Electro-Mechanics said nothing has been decided yet.

While the global automotive industry has been actively dealing with a protracted and unprecedented semiconductor shortage ― triggered by surge in demand for consumer electronics during the COVID-19 pandemic ― Samsung Electro-Mechanics' planned capacity expansion of FC-BGAs is attracting the attention of top-tier technology companies, such as Intel and AMD, according to sources.

"Thanks to the continued chip shortages, demand for advanced PCBs using FC-BGA technology will remain solid throughout the next couple of years, and that means top semiconductor companies such as AMD and Intel are taking pre-emptive steps in terms of striking pre-purchase deals with PCB suppliers and providing them with financial assistance for the custom production of the components," the source said.

On a related note, U.S. chip giant Intel was said to have offered Samsung Electro-Mechanics millions of dollars in financial backing in May for the custom production of FC-BGA circuit boards to ensure a smooth supply of the components.

It remains unclear whether Samsung Electro-Mechanics accepted Intel's offer of support or if the planned capacity expansion is unrelated.

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