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LG Innotek positions physical AI expansion as core growth strategy

Published: 11 Jan. 2026, 16:13

Moon Hyuk-soo, the CEO of LG Innotek, speaks with reporters at CES 2026 in Las Vegas on Jan. 7. [LG INNOTEK]

LG Innotek plans to restructure its business portfolio and boost profitability by positioning physical AI expansion as a core growth strategy.

LG Innotek CEO Moon Hyuk-soo outlined the company's future plans while speaking with reporters at CES 2026 in Las Vegas on Wednesday.

"[LG Innotek] is no longer a component supplier but a solutions provider,” Moon said. “This year will mark a full-scale push to restructure our business toward high-margin, high-value segments via differentiated solutions.”

The company has traditionally produced parts, such as smartphone camera modules, substrates used in semiconductor packaging and automotive sensors, but it now aims to secure future growth engines through a solutions-based model.

This approach includes combining existing components and developing integrated software that controls multiple parts. A key example is its integrated convergence solutions for autonomous driving, which was unveiled at CES this year and combines vehicle camera modules, lidar, radar and related software.

A CES 2026 attendee photographs LG Electronics' Mobility Display Solution in Las Vegas on Jan. 7. [AP/YONHAP]

“The business model focusing on [...] supplying individually developed parts is losing competitiveness,” Moon said. “With our innovative technologies and product portfolio, we aim to become a company that delivers optimal solutions for everything related to AI that moves — namely physical AI.”

LG Innotek recently reorganized and renamed its Substrate and Material business division to Package Solution and its Automotive Components business unit to Mobility Solution.

This year, the company plans to expand its semiconductor substrate business to boost profitability. Demand for high-performance, high-density mobile semiconductor substrates continues to rise amid the spread of 5G communications and heightening performance requirements for smartphones.

As of the third quarter of 2025, cumulative revenue from the Package Solution unit rose 14.3 percent from a year earlier, and operating profit jumped 65 percent.

“Demand for semiconductor substrates will likely continue to grow,” Moon said. “We will concentrate on expanding the Package Solution business to build a stable profit-generating structure.”

Moon also identified robot components and glass substrates as future growth businesses.

A screen reads 'AI in the physical world' during Rivian's first Autonomy & AI Day, when self-driving technology developments are showcased, in Palo Alto, California, on Dec. 11, 2025. [REUTERS/YONHAP]

“Mass production of sensing components for robots will begin this year, with revenue expected to reach tens of billions of won,” he said. “Relying on our core technologies in sensing, substrates and control systems, we will continue to identify and review commercialization opportunities in areas such as robot sensing materials, actuators and tactile sensors.”

Moon added that he had met with robotics companies and automakers during CES 2026.

For glass substrates, a next-generation semiconductor packaging technology, Moon set 2028 as the target year for piloting mass production.

“Product development for glass substrates is complete, but we will continue research and investment this year to improve productivity,” he said. “Industry demand will likely arise around 2030.”

Glass substrates can be used in place of plastic in semiconductor packaging and allow for more finely patterned circuits and resist warping. However, cracks in the glass remain a key hurdle to commercialization.

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]]