Samsung Electro-Mechanics will spend 2.51 trillion won ($1.84 billion) of a 6.78 trillion won ($4.97 billion) FCBGA expansion program at its Vietnamese subsidiary, with the facility scheduled to begin operations in June 2030. The September 29 announcement is the largest in a series of investments that shift more technically demanding semiconductor processes toward Vietnam as the industry reallocates capacity to meet AI demand.

The pressure on capacity is measurable. Samsung Electronics forecasts that high-bandwidth memory, the type used alongside AI processors, could account for nearly 30% of the industry's DRAM wafer capacity by 2027, up from around 20% today. HBM consumes more manufacturing resources per wafer than conventional DRAM, and both compete for the same wafer capacity. New processes that yield more memory capacity per wafer partly offset the squeeze, but the industry's main response has been to expand capacity across the supply chain: memory, CPUs, GPUs, packaging substrates, circuit boards, servers and data-center infrastructure.

Export data illustrate the demand pull. South Korean semiconductor exports rose 259.4% year-on-year in the first 20 days of September, against a 78.3% rise in total exports. A Reuters poll of 18 economists forecast September exports up about 62%, with AI-driven semiconductor demand among the main growth engines.

Where the money is going

Samsung Electro-Mechanics is splitting its FCBGA program between 4.27 trillion won ($3.13 billion) at Sejong in South Korea and roughly 2.51 trillion won in Vietnam. FCBGA substrates sit beneath a chip and connect it to a circuit board; for AI chips and high-performance servers, the component is moving toward larger sizes, more layers and greater complexity. The company expects AI infrastructure investment to continue for the next two to three years.

LG Innotek is following the same pattern. In June it announced plans to expand semiconductor packaging substrate production to its factories in Hai Phong, producing RF-SiP, FC-CSP and FC-BGA. By the end of July, its project at DEEP C Hai Phong 2 had received an investment certificate at a scale of about $1 billion — the company's first packaging substrate facility outside South Korea. Pilot production is expected in the third quarter of 2027, mass production in the third quarter of 2028. The company cites FC-BGA demand from major technology companies increasing AI and computing infrastructure investment.

Intel is also reallocating capacity. In early May 2026, the management board of Ho Chi Minh City's Saigon Hi-Tech Park said Intel is moving some assembly, packaging and testing activities from Costa Rica to Vietnam, producing chips for data-center servers and next-generation networking systems. The move forms part of Intel's strategy to concentrate assembly and testing at larger facilities in Vietnam and Malaysia. Intel is also transferring advanced packaging and testing technologies to strengthen the Ho Chi Minh City site.

Samsung Electronics adds memory testing. Documents seen by Reuters in May showed a planned VND39 trillion ($1.5 billion) chip testing facility focused on DRAM and NAND, expected to begin operations in November 2027. There is not enough evidence to link this directly to the HBM reallocation, but it gives Vietnam additional testing capacity precisely as global manufacturers shift advanced capacity toward AI products.

The FDI picture

Registered foreign direct investment in Vietnam reached $40.63 billion in the first eight months of 2026, up 55.4% year-on-year. Manufacturing and processing accounted for about $20.18 billion in newly registered and additional capital, or 59.5% of those two categories, and about $14.24 billion in realized investment — 82.6% of total disbursements.

The composition matters more than the totals. Vietnam's role in the electronics supply chain has long centered on smartphones, computers and final assembly. The new projects add memory testing, FCBGA substrates and packaging for data-center chips. Vietnam has not entered chip fabrication.

Caveats remain. At Samsung Electro-Mechanics, Sejong keeps the high-performance, more complex FCBGA products, while Vietnam expands global supply capacity. At LG Innotek, South Korean facilities retain new technology development and higher-value products. Japanese technology expert Tsuda Kenji, editor-in-chief of News & Chips, was quoted by foreign media as saying Vietnam should prioritize links where it can build competitive advantage — chip manufacturing and packaging — rather than spreading resources across the entire chain, and should develop domestic equipment and materials suppliers to build a local ecosystem.

Output effects will lag. LG Innotek's Hai Phong site starts pilots in Q3 2027; Samsung Electro-Mechanics's FCBGA facility begins operations in June 2030. Near-term benefits show up in capital inflows and repositioning within the supply chain. A second variable is the global AI investment cycle: if data-center construction and chip purchases slow, capacity expansion plans could be adjusted.