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LG Innotek develops next-gen substrate for smart cards, cuts carbon emission by half

Published: 10 Dec. 2025, 15:16 Updated: 10 Dec. 2025, 19:04

A mock credit card installed with LG Innotek's next-generation smart IC substrate [LG INNOTEK]

LG Innotek has developed a next-generation smart IC (integrated circuit) substrate, a core component in smart cards, that requires no metal plating. The breakthrough enables the company to target the smart card market under increasingly stringent environmental regulations.

On Wednesday, LG Innotek announced that it has developed the world’s first high-performance smart IC substrate that functions without the use of precious metal plating. Smart IC substrates transmit electrical signals to the IC chip in smart cards, such as credit cards and SIM cards, and protect the chip from external damage. The metallic grid typically seen on these cards corresponds to the substrate.

Until now, plating with precious metals such as palladium and gold has been essential to prevent corrosion and ensure stable signal transmission. However, these metals are costly and generate large amounts of greenhouse gases during the mining process.

LG Innotek has instead developed a new material that eliminates the need for plating, reducing carbon emissions by approximately 50 percent while tripling durability compared to existing substrates. The company has secured more than 20 domestic patents related to the new material and is pursuing patent registration in the United States, Europe and China.

With this technology, LG Innotek plans to accelerate its expansion into overseas markets, particularly by responding to rising demand in Europe, where environmental regulations are becoming stricter. The company signed a supply agreement last month with a major smart card manufacturer in France and has already begun mass production of the new substrate.

The smart card industry is seeing a surge in replacement demand as dual-interface cards — which support both contact and contactless transactions — become more common. Emerging markets such as Africa and India are also seeing increased credit card issuance. According to market research firm Mordor Intelligence, the global smart card market is expected to grow from approximately $20.3 billion this year to around $30.6 billion by 2030.

A mock credit card installed with LG Innotek's next-generation smart IC substrate [LG INNOTEK]

As the substrate business gains traction abroad, it is expected to help LG Innotek diversify its revenue sources. Over 80 percent of the company’s current revenue comes from its optical solutions division, which supplies camera modules for Apple’s iPhones — a dependency that makes the company’s performance vulnerable to fluctuations in iPhone sales. Expanding into automotive components and substrate materials has been identified as a key priority.

The Package Solution Division, which oversees the substrate business, delivered solid results in the third quarter. It supplied flip-chip ball grid array substrates for PCs to a major North American tech client and succeeded in mass-producing copper post substrates for next-generation mobile semiconductors. The division posted an operating profit of 80.2 billion won ($54.5 million), up 65 percent from the same period last year.

“The next-generation smart IC substrate meets both our clients’ ESG requirements and their technical standards,” said Cho Ji-tae, executive vice president and head of the Package Solution Division. ESG stands for environmental, social and governance. “We will continue to introduce innovative products that deliver differentiated value and grow as a partner that realizes our customers’ vision.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY LEE GA-RAM [[email protected]]