South Korea’s LG Innotek Co. and Samsung Electro-Mechanics Co. are expected to engage in a fierce competition in the market of a flip chip-ball grid array (FC-BGA) package, which is an essential component in the development of future cars, according to sources on Wednesday.

Both companies have chosen automotive parts business as their core area of focus, with LG Innotek announcing its intention to secure high-value and strategic customers by concentrating on electronic components and responding effectively to the autonomous driving and electric vehicle markets.

Samsung Electro-Mechanics has a plan to expand the proportion of electronic components for automotive use and strengthen its product lineup, including multilayer ceramic capacitors, camera modules and autonomous driving components.

FC-BGA is a semiconductor substrate needed to process large amounts of information, which is essential for the operation of future vehicles.

LG Innotek has been actively pursuing FC-BGA business since February last year, with the aim of achieving full-scale production in the second half of this year. On the other hand, Samsung Electro-Mechanics started mass production of server-use FC-BGA last year and succeeded in developing a vehicle-use product earlier this year.

As electrification of automobiles accelerates, the core technology of these car electronics companies is gaining more attention than ever before. With a significant shift towards electric vehicles in the automotive industry, both LG Innotek and Samsung Electro-Mechanics have recognized the importance of developing technology that can support the unique demands of the electric vehicle market.

The Korean government has also recognized the importance of the future car industry and plans to release a comprehensive plan in the first half of this year to promote it as an advanced industry sector.

Key materials and parts for internal combustion engine vehicles in Korea are almost 100 percent localized, but the corresponding rate for future car parts is below 70 percent.

This discrepancy highlights the need for more investment and support in the development of domestic technology in the future car industry, experts said.

By Choi Seung-jin and Minu Kim

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