Broadcom just picked its next supplier, and it is not Samsung Electronics or SK Hynix.

Everyone who follows Korean stocks knows Samsung Electronics and SK Hynix make the memory chips that go inside AI processors. Fewer people know that a different set of Korean companies makes something just as important: the small board that chip sits on. This year, two of them, Samsung Electro-Mechanics (009150.KS) and LG Innotek (011070.KS), have been racing for the business of Broadcom (AVGO), the company that designs custom AI chips for Google, Meta and OpenAI.

What a substrate actually does

A finished AI chip does not sit directly on a circuit board. It sits on a smaller board of its own first, called a substrate, wired with thousands of tiny connections that carry power and data between the chip and everything around it. That board has mostly been built from an organic resin core, a very advanced cousin of what a normal circuit board is made from. As AI chips have gotten bigger and run hotter, that organic core has started to bend and warp under the heat, which throws off the tiny connections underneath the chip. The fix the industry is chasing now is to replace that core with glass, which stays flatter and handles heat better.

Samsung's other company gets there first

Samsung Electro-Mechanics is not Samsung Electronics. It is a separate, smaller Samsung Group company that makes components rather than finished phones or memory chips, and chip substrates are one of its three main businesses. In April, Korean outlet Hankyung reported that Samsung Electro-Mechanics had won Broadcom as a new customer for high end AI chip substrates. What came next mattered more: the company has been supplying glass substrate samples to Broadcom, and separately to Apple, which is testing the material for its own AI server chip work.

Samsung Electro-Mechanics runs a pilot glass substrate line at its Sejong facility in South Korea and is targeting mass production after 2027. It also signed an agreement in November 2025 with Japan's Sumitomo Chemical to build a joint venture, called Glass Core, to produce the glass core material itself, with Samsung Electro-Mechanics holding the majority stake and final contract terms expected to be settled this year. None of that is revenue yet. It is a company positioning itself for a bet that has not paid off.

The size of that bet is why Broadcom's name keeps coming up. JPMorgan estimates Broadcom controls somewhere between 55% and 60% of the global market for the custom AI chips known as ASICs. If a supplier that large moves to glass substrates, the rest of the industry is expected to follow fast. We track Broadcom's own SEC filings here, though the glass substrate work is still at the sample stage and has not shown up in one yet.

LG Innotek is chasing the same prize from behind

LG Innotek is making a similar bet on a different version of the same idea. In late May, at a packaging conference in Orlando, the company showed off a substrate design that embeds part of the chip inside the board itself, which it said cuts power delivery loss by about 25% compared with its earlier designs. The company has set a goal of growing this part of its business, called Package Solutions, into a 2 billion dollar unit, roughly 3 trillion won, by 2030.

LG Innotek is already putting its own money into this. Under an agreement reached in March 2025, it is spending roughly 600 billion won, about 400 million dollars, expanding its existing plant in Gumi, North Gyeongsang province, with that spending due to wrap up by the end of this year. On top of that, Seoul Economic Daily reported in June that three unnamed global AI chip developers had proposed investments of a trillion won or more, over 650 million dollars, to expand LG Innotek's substrate lines further, with two of them discussing long term supply agreements. None of the three has been named publicly, and it has not been confirmed that Broadcom is one of them. LG Innotek's decision on that outside money is expected around September.

Separately, on July 3, officials in Hai Phong, Vietnam confirmed LG Innotek will build a 1 billion dollar, roughly 1.5 trillion won, substrate plant there, its first overseas substrate factory. Construction is due to start in the third quarter of this year, with trial production in 2027 and mass production by the third quarter of 2028. The plant will make three kinds of substrates, including the FC-BGA type used in AI servers, alongside substrates for phones and cars. That timeline means this specific plant will not add AI chip revenue for at least two more years.

Why this matters beyond these two stocks

I have written before about how just two stocks, Samsung Electronics and SK Hynix, make up such a large share of the Kospi that they can drag the whole index around by themselves. Samsung Electro-Mechanics and LG Innotek are smaller and do not move the index the same way. But they are a sign that Korea's role in the AI chip story is not only about memory anymore. Hankyung, one of Korea's own financial papers, put it plainly in April: Korean component makers are turning into partners big tech companies need, not interchangeable subcontractors, because they now hold pieces of the AI supply chain nobody else can easily replace. Packaging and substrates are their own bottleneck in the industry right now, one covered here from the American side of the same shortage, and Korea is trying to own a piece of it the same way it already owns high bandwidth memory.

Neither stock has been spared from this month's broader selloff. Like almost everything on the Kospi, both have fallen hard along with Samsung Electronics and SK Hynix in the swings I have covered all week. None of the news above changes that overnight. Glass substrate mass production is still more than a year away, and LG Innotek's investment decision will not land until around September. This is a supply chain story to watch build over the rest of the year, not a headline that explains a single day's move.

Sources

• Hankyung (Korean language): Samsung Electro-Mechanics and LG Innotek become critical partners, not subcontractors, in the AI supply chain
• The Elec (Korean language): Samsung Electro-Mechanics supplies glass substrate samples to Apple
• Electronic Times / etnews (Korean language): Samsung Electro-Mechanics and Sumitomo Chemical sign MOU for Glass Core joint venture
• Hankyung (Korean language): LG Innotek targets 3 trillion won in package substrate revenue by 2030
• The Economy, Korean edition (Korean language): glass substrates and the race for AI chip packaging, JPMorgan market share estimate
• LG Innotek newsroom (Korean language): next-generation substrate technologies showcased at ECTC
• Seoul Economic Daily (Korean language): three big tech firms court LG Innotek with AI substrate investment
• Financial News (Korean language): LG Innotek's 1 billion dollar Hai Phong substrate project approved
• Our earlier coverage: why the Kospi moves so violently and advanced packaging, the AI chip bottleneck

Cover photo: LG Innotek's large-area and ultra-large-area FC-BGA substrate samples, shown at ECTC 2026. Photo courtesy of LG Innotek's newsroom.

Figures in this piece are sourced from Korean and international financial media, company announcements, and public conference presentations. This is not investment advice.