LG Innotek Accelerates Corporate Transformation Driven by Semiconductor Substrates and Physical AI
- Building stable earnings resilience with semiconductor substrates
- Expanding physical AI businesses to secure future growth engines
SEOUL, South Korea, Sept. 30, 2026 /PRNewswire/ -- LG Innotek is demonstrating tangible results from the transformation of its business portfolio, delivering a remarkable performance rebound in the first half of the year—traditionally an off-peak season for the company.
For the first half of the year, LG Innotek posted revenue of USD 8.22 billion and an operating profit of USD 401.96 million, representing year-over-year increases of 24 percent and 296 percent, respectively. This is the first time since 2022 (USD 480.79 million) that the company has delivered such an "earnings surprise" during the traditionally off-peak first half.
Building stable earnings resilience with semiconductor substrates
Since CEO Moon Hyuksoo took the reins in 2023, LG Innotek has focused on intensive business structure reform by reorganizing its business portfolio to establish a high-margin, high-value-added "High Performance Portfolio," aiming to build a resilient earnings structure capable of withstanding external variables and drive sustainable future growth.
Over its more than 50 years in the substrate business, LG Innotek has built unmatched technological competitiveness. Leveraging this expertise, the company has introduced market-leading products that have secured leading global market shares, successfully transforming its semiconductor substrate business into a highly profitable, high-value enterprise.
A major example is the company's RF-SiP (Radio Frequency-System in Package) substrate, which incorporates Cu-Post (Copper Post) technology. LG Innotek has maintained the top spot in terms of global market share of RF-SiP substrates among the top five global clients since 2016. The company differentiated itself from its competitors by becoming the world's first to implement Cu-Post technology, a key technology that enabled slimmer smartphones. As a result, LG Innotek's market share is projected to reach nearly 80 percent this year (among the top five clients).
Meanwhile, FC-CSP (Flip Chip-Chip Scale Package) substrates, which were primarily used in mobile application processors (APs), have recently expanded into the memory sector following the AI boom, emerging as a new cash cow for the company.
Following its mass production of FC-BGA for PC chipsets targeting big tech clients last year, LG Innotek initiated high-volume mass production of FC-BGA for PC CPUs in the third quarter of this year. Simultaneously, the company is rapidly boosting revenue by securing additional major clients. Starting next year, it plans to sequentially enter the AI accelerator and AI server markets.
Revenue from LG Innotek's package solution business has maintained an upward trajectory for three consecutive years. With the package solution business demonstrating tangible results alongside its optical solution business, the company has strengthened its capacity to generate stable earnings.
LG Innotek plans to rapidly expand its market share in the emerging semiconductor substrate market, aiming to grow its package solution business, including semiconductor substrates, into a business generating USD 743 million in operating profit by 2031.
Expanding physical AI businesses to secure future growth engines
LG Innotek is establishing a stable profit structure through its high-value camera module and semiconductor substrate businesses while actively driving its expansion into new future growth areas. Its physical AI solution business is a prime example.
Among these initiatives, the autonomous driving sensing solution business is progressing the most rapidly in terms of commercialization. This area is fertile ground for the company's rapid expansion and application of the unmatched optical capabilities it has gained through its mobile camera module business.
LG Innotek is recognized as one of the few companies in the industry equipped with comprehensive technology spanning not only conventional automotive cameras but also LiDAR (Light Detection And Ranging) and radar. Leveraging this robust portfolio as a key differentiator, the company is accelerating its efforts to capture market leadership.
In March this year, LG Innotek signed strategic partnerships with companies such as Applied Intuition, an autonomous driving software company in the United States, to jointly develop autonomous driving solutions, accelerating its efforts to strengthen business competitiveness.
In May last year, LG Innotek signed an agreement with Boston Dynamics, a global leader in robotics technology, to develop robotic components. This past July, the company signed a strategic partnership with Japan's TDK for the joint development of various sensing solutions for physical AI, including vision sensing modules and tactile sensing modules for robotic hands, boosting its competitiveness in the robotics component business.
LG Innotek's robotics component business generated revenue for the first time this year. The company is currently mass-producing camera modules for humanoid robot clients at its Paju factory in Korea. Once full-scale mass production commences, revenue is expected to increase significantly.
The key differentiator LG Innotek leverages in the competition for robotic component orders is its capability as a so-called "physical AI total solution provider." Humanoid robots require various components, including sensing modules, connectivity communication modules, and semiconductor substrates. Possessing a wide range of relevant core technologies, LG Innotek is evaluated as having an overwhelming competitive edge in swiftly securing a leadership position in the robotics component market.
In the future, LG Innotek plans to grow its future businesses, including semiconductor substrates and physical AI solutions, to USD 5.94 billion by 2030. The company aims to have such future new businesses account for 25 percent of total revenue, thereby completing a well-balanced business portfolio.
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