LG Innotek looking to close PCB plant by October

LG Innotek is most likely to shutter its operations in Cheongju producing smartphone HDI PCBs by October, according to industry sources on July 29.

They said that some of the lines have already been halted, and that LG Innotek is relying on other PCB companies to handle the orders. “LG Innotek more or less made it clearn last year that it will be closing its Cheongju operations,” said one of the sources.

He added that the firm plans to give up its RFPCB business, while maintaining those involving semiconductor packages.

RFPCB is the primary PCB used in smartphones, and LG Innotek manufactures these at Cheongju. Semiconductor packages are value-added products being produced from the firm’s operations in Gumi area.

A chemical company that supplied the LG unit said that as of the latter half of last year, it is supplying a dramatically reduced amount of chemicals into the Cheongju plant.

“Some chemicals are still used, but it’s an insignificant amount, meaning that the lines aren’t in operation.”

The Cheongju plant produces an annual 156,000 sheets of HDI. This is about 70% smaller than the 504,000 sheets from last year. The reduction came after LG Innotek closed and merged its Osan plant. As of the last quarter of last year, the HDI boards that were produced at both Cheongju and Osan were being produced solely from Osan.

“It’s only a matter of time before the Cheongju operations close down completely,” said another market watcher. He forecast a merger between the Cheongju plant and the plant in Gumi. “This is hardly new news,” he added.

Meanwhile, suppliers for LG Innotek are upset over the firm’s vague attitude towards the Cheongju operations, despite that rumors have been floating for almost a year now. “The suppliers need to know in order to find new clients,” said one industry source close to the matter.

Some of the suppliers have requested LG Innotek to give them notice by the end of this month.
LG Innotek’s HDI business has been suffering on the dormant progress of its main client, LG Electronics, in the smartphone business.

By 2017, its annual sheet production had fallen to 504,000 from the 564,000 between 2013 and 2016. Last year, its plant operation rate tumbled to 51% from the previous year’s 80%.

LG Innotek declined to comment.

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