Samsung Electro-Mechanics (SEMCO, KRX: 009150) is accelerating its push into flip chip ball grid array (FC-BGA) substrates for application-specific integrated circuits (ASICs), a market growing rapidly with the rise of artificial intelligence (AI). On August 22, the company reported a sharp profit decline in its package solution division, but highlighted FC-BGA as a key driver for recovery.

According to its semi-annual filing, operating profit for the substrate-focused package solution business fell to KRW 47.5 billion ($35 million) in the first half of 2025, down 23% from a year earlier and more than 50% lower than the same period in 2023. Weakened IT demand and delayed adoption of high-value substrates such as AI and server FC-BGA have weighed on performance.

To reverse the downturn, SEMCO is expanding shipments of FC-BGA. The company has begun supplying Amazon with FC-BGA for its custom AI chip, Trainium, and is preparing to extend supply to Apple, Google, and Meta in 2026 as those firms ramp up development of their own ASICs. Industry sources also expect shipments to Tesla to increase, as Samsung Electronics' foundry business recently secured a large-scale contract to manufacture Tesla's next-generation AI chips. SEMCO is already the exclusive supplier of FC-BGA for Tesla's AI4 and is likely to begin supplying FC-BGA for the upcoming AI5 next year.

FC-BGA substrates are larger than chips, making them critical for high-performance applications in AI, servers, PCs, cloud computing, and electric vehicles. With more circuit layers than conventional substrates, FC-BGA improves power efficiency and overall chip performance. According to Fujifilm Research Institute, the global FC-BGA market is projected to more than double from $8 billion in 2022 to $16.4 billion by 2030.

SEMCO invested nearly KRW 2 trillion ($1.5 billion) in 2021 to expand FC-BGA production capacity. Although considered a late entrant compared with competitors like Ibiden, the company is catching up quickly in technology and scale. By diversifying beyond its heavily MLCC-weighted portfolio, Samsung Electro-Mechanics aims to strengthen profitability through high-value semiconductor substrates, with full-scale FC-BGA supply expected to begin next year.