Samsung Electro-Mechanics, LG Innotek substrate lines near full capacity as AI demand rises

The surge in AI compute demand has pushed substrate production lines near full capacity, highlighting semiconductor packaging as a new bottleneck. Upstream suppliers of silicon wafers and photoresists benefit from increased equipment utilization, yet midstream packaging firms face delays in capacity expansion. Technologically, HDI and 2.5D/3D packaging are accelerating, raising substrate design complexity and pushing manufacturers toward higher automation. Geopolitically, U.S. chip export controls are reshaping supply chains, prompting Korean firms to expand in Southeast Asia, though short-term capacity constraints remain. In market terms, TSMC and UMC may accelerate vertical integration in substrates to strengthen supply chain control. Over the next 12-24 months, sustained AI server demand will likely keep substrate prices elevated, intensifying cost pressures and supplier negotiations. Without new capacity, the industry may face structural shortages, spurring a new wave of technological transitions.