Samsung, LG and Daeduck to benefit from Unimicron fire

South Korean semiconductor board makers are positioned to benefit from Taiwanese counterpart Unimicron’s fire in one of its factory.

Unimicron’s supply of flip chip chip scale package (FC-CSP) for application processes to Qualcomm will now be shifted to Samsung Electro-Mechanics, LG InnoTek and Daeduck Electronics as well as Taiwan’s Kinsus Interconnect Technology, people familiar with the matter said.

The four companies are close to signing a FC-CSP supply deal with Qualcomm, the people said.

Unimicron suffered a fire in October at its factory at Shanying in Taoyuan city. Shanying factory produce boards for Qualcomm and it is expected to take around a year for operations to return to normal.

Any delay in Qualcomm’s application processor production could also negatively affect Samsung Electronics’ smartphone production.

Shanying factory mostly produced FC-CSP for Qualcomm’s 5G AP. The factory posts around 160 billion won to 170 billion won in sales per year. 

Samsung Electro-Mechanics is expected to add hundred billion wons in sales by supply to Qualcomm. The company’s margin from FC-CSP are reportedly in the double digits.

South Korean semiconductor board makers may also continue to supply their goods to Qualcomm even after Unimicron’s factory is repaired a year later.

Unimicron may very well convert the factory to produce flip chip ball grid array (FC-BGA) instead of FC-CSP for higher profitability. However, Japan’s Ibiden dominates the global FC-BGA market and Unimicron may very well just continue to produce FC-CSP.