After LG, Samsung Also Announces Exit from HDI Business, Shuts Down Kunshan Company in China

According to a report by the JoongAng Ilbo, Samsung Electro-Mechanics announced at its board meeting on December 12 that it will liquidate its Kunshan, China subsidiary, officially exiting the smartphone mainboard (HDI) business.

It is reported that Kunshan Samsung Electro-Mechanics was registered and established in 2009 and began mass production of HDI in June 2010, becoming Samsung Electro-Mechanics' primary HDI production base.

Since October this year, Samsung has already relocated HDI equipment from its Busan factory to Vietnam. After the move, the Vietnam facility will only produce after-sales related products, gradually scaling down operations until a complete exit.

Analysts believe that Samsung Electro-Mechanics' decision to exit the HDI business is due to the loss of competitive advantage and continuously declining profitability caused by the low-price strategies of Chinese manufacturers. Kunshan Samsung Electro-Mechanics has incurred losses for five consecutive years, rendering the entire HDI business unprofitable.

Last month, LG Innotek also announced its decision to terminate its HDI business, citing decreased demand for high-value-added products in mobile devices and intensified competition. After exiting, the company plans to shift some resources to its semiconductor business.

Samsung Electro-Mechanics intends to focus on semiconductor packaging substrates and rigid printed circuit boards (RF/PCB) after exiting the HDI business, aiming to enhance the profitability of its core operations.

Source: China Semiconductor Industry Association