LG Innotek Expands into High-Spec Packaging Server CPUs

[Financial News] Daol Investment & Securities said on the 30th that LG Innotek's Package Solution division is discussing long-term supply agreements (LTAs) with key customers covering 3-5 years of volume from 2028 onward. The agreements are centered on production capacity (CAPA) allocation. The talks are reportedly moving toward including penalty clauses if the agreed volumes are not met. Daol Investment & Securities maintained its Buy rating on LG Innotek but lowered its target price from 1.1 million won to 1 million won.
Kim Yeon-mi, an analyst at Daol Investment & Securities, said, "It is necessary to pay attention to the possibility of entering the server CPU value chain in 2028. Volume growth will pick up in earnest from the second quarter of 2027, led by PC products. Starting with general server CPUs in 2028, we expect the product lineup to expand eventually to high-spec packaging server CPUs."
Regarding Optical Solution, Kim said, "Shipments have been proceeding smoothly since mass production of the new model began in August. The new model's average selling price (ASP) is estimated to have risen by about 30% as the adoption of variable apertures expands," adding, "Since price renegotiations are typically conducted in the first quarter of the following year, there are also limited additional factors that could drive prices lower in the second half."
She then emphasized, "It is necessary to shift the focus to 2027 earnings, when the expansion of FC-BGA's contribution to profits becomes visible." 

[email protected] Kang Gu-gwi Reporter