The glass substrate business is hindered as Samsung Electro-Mechanics has not passed customer certification, delaying production line investment

According to South Korean media reports on August 12, Samsung Electro-Mechanics has faced continuous delays in production line investment and equipment orders due to the company's failure to obtain customer reliability assessment certification for glass substrate samples.

Insiders revealed that after the Samsung Electro-Mechanics samples failed the assessment, new samples need to be remade for resubmission, and the original timeline will inevitably be further delayed. "It is currently impossible to complete the new sample manufacturing within one or two weeks, so it is uncertain whether production line investment can start within this year."

In early July, Samsung Electro-Mechanics established a joint venture company, GlaSSEM, with Toyo Fine Chemicals, a subsidiary of Japan's Sumitomo Chemical. Since November last year, Samsung Electro-Mechanics has begun issuing equipment order plans for the GlaSSEM production line to its partners, but the timeline has been continuously delayed: from November last year to December of the same year, then to March and June of this year, and after June this year, Samsung Electro-Mechanics has not provided any subsequent timeline plans.

"By the end of July, the industry generally believed that equipment orders were about to be finalized," an industry insider stated, "but now it is difficult to say when it can be restarted. Due to multiple delays in the timeline, it is even challenging to make a rough estimate of the specific ordering time internally."

Currently, Samsung Electro-Mechanics is producing glass substrate samples at its Sejong factory, and most of the selection work for major process equipment suppliers, including deposition equipment, etching equipment, laser drilling equipment, and testing equipment, has been completed.

Samsung Electro-Mechanics originally planned to start procuring major process equipment from the deposition equipment with the longest delivery time and to have the equipment installed at Toyo Fine Chemicals' factory in Pyeongtaek, South Korea, by April next year, aiming to complete the construction of the first production line in the second quarter of next year. It is reported that for equipment with longer delivery times, Samsung Electro-Mechanics even considered placing orders in its own name first and then transferring the contracts to GlaSSEM.

When Samsung Electro-Mechanics announced the establishment of GlaSSEM earlier last month, it aimed to start production in the second half of 2027. However, in the recent announcement of its second-quarter results, the company adjusted the production start time to 2028 in less than a month.

Now, due to the indefinite delay in equipment orders, Samsung Electro-Mechanics will inevitably postpone the mass production timeline for glass substrates. Even if equipment orders can be completed within this year, considering the equipment manufacturing cycle, the construction of the production line will not be completed until the second half of next year at the earliest. It is understood that the mass production start time has been postponed to after 2028.

It is worth mentioning that earlier this month, there were also changes reported regarding LG Innotek, which is also targeting glass substrates. Industry insiders revealed that LG Innotek is considering applying glass substrates to image sensor packaging for humanoid robots. Due to the high heat dissipation and computational load of AI servers, the company is currently facing challenges in applying glass substrates to AI servers, but the environmental pressure for robots is relatively lower, thus having advantages in technical verification and commercialization. LG Innotek plans to expand its business into the semiconductor packaging field for AI servers after accumulating technology and mass production experience in humanoid and industrial robots