SKC Invests 1.17 Trillion Won in Glass Substrates, Can It Help SK Hynix Further Widen the Gap With Samsung?

Glass substrates are a novel material for semiconductor packaging. Compared to traditional organic substrates, they feature a lower coefficient of thermal expansion, higher flatness, and minimal signal loss, which can increase interconnect density by approximately tenfold and reduce high-temperature warpage by about 70%. As a critical material for advanced packaging technologies like HBM4, their mass production progress will directly influence the launch cadence and performance ceilings of next-generation AI memory chips.

SKC is a materials subsidiary of SK Group, specializing in semiconductor materials and copper foil. While SKC and SK Hynix are sister companies under the same SK Group umbrella, SKC operates independently and can supply any customer, including Samsung. Unless mandated by the group, this "sibling relationship" does not automatically translate into an exclusive advantage for SK Hynix.

For SK Hynix, if SKC is the first to mass-produce glass substrates, SK Hynix could gain earlier verification opportunities and flexible cooperation, securing a strategic window for HBM4 and widening its lead over Samsung. Conversely, if Samsung Electro-Mechanics achieves mass production first, Samsung Electronics will gain an advantage in packaging costs and integration efficiency, while SK Hynix faces the pressure of catching up. This competition will directly influence the packaging costs and time-to-market for both memory giants.

SKC, Samsung Electro-Mechanics, and LG Innotek all plan to achieve mass production of glass substrates between 2026 and 2028, but their respective paths and risks differ:

SKC has completed the world's first dedicated mass-production facility, and samples have been sent to AMD ( AMD) and AWS for testing, with a target of mass production by the end of 2026. While its first-mover advantage is significant, its risk profile is also the highest; if the yield rate ramp-up falls short of expectations, market confidence will be shaken, and the stock price could face a sharp correction.

Backed by the Samsung Group, Samsung Electro-Mechanics possesses strong financial resources and is collaborating with Sumitomo Chemical to develop glass core materials, aiming for mass production after 2027. This approach is more conservative, but its production timeline lags behind SKC, creating immense pressure to catch up; notably, the extent of Samsung Electro-Mechanics' openness to external customers remains unclear, which could limit its market share.

LG Innotek focuses on optoelectronic hybrid transmission technology, offering the highest degree of technical uniqueness, but mass production is not expected until 2028, limiting its short-term impact on the competitive landscape. The core risk lies in whether this technological path gains market acceptance.

From a competitive standpoint, the outcome between SKC and Samsung Electro-Mechanics will directly determine who controls the glass substrate standards over the next five years. Currently, neither company has achieved mass production, with yield rates being a shared challenge. Market pricing has already largely accounted for optimistic expectations regarding SKC, while the risks facing Samsung Electro-Mechanics are relatively overlooked.

Mass production of glass substrates relies on specialized equipment such as TGV laser drilling, PVD coating, and high-precision inspection. According to Founder Securities data, the investment for a single glass substrate production line is approximately RMB 1.3-1.5 billion, with equipment accounting for more than 80%. Order changes from equipment manufacturers are the most direct window for observing mass production progress.

Key suppliers include: in terms of specialty glass materials, Corning of the U.S. ( GLW ), Japan's Asahi Glass (AGC), and Nippon Electric Glass together account for more than 90% of global capacity; in terms of TGV laser drilling, Taiwan's Gallant Precision Machining (8064) has already shipped; in terms of advanced packaging equipment, Applied Materials of the U.S. ( AMAT) provides lithography and PVD equipment, while Japan's Toray Engineering has launched PLP mounting equipment; in terms of inspection equipment, Onto Innovation of the U.S. ( ONTO) and KLA ( KLAC) provide full-process metrology solutions.

SKC's Absolix plant is located in Georgia, U.S. Should its glass substrate products involve exports to China in the future, it may face export controls or revenue-sharing policies similar to those governing semiconductor equipment.

While glass substrates are not currently explicitly included on restricted lists, this potential risk could indirectly impact equipment manufacturer orders and customer purchasing intent, which warrants investor attention.

In the short term, three signals warrant attention: customer certification upgrades, equipment manufacturer orders, and SKC yield data.

Specifically, whether Absolix's customer certification can upgrade from "engineering sample testing" to "intent orders for mass production" can be tracked via AMD and AWS earnings calls or supply chain dynamics; regarding equipment providers, monitor whether Applied Materials, Onto Innovation, and others disclose glass substrate-related equipment revenue in their quarterly reports; furthermore, whether SKC management publicly provides more specific yield figures is another key observation point.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.