Doosan Bets 700 Million Dollars on AI Chip Materials

Doosan Corp. has announced a 970 billion won investment plan to increase the production of high-performance copper-clad laminates. These materials are essential components for artificial intelligence accelerators, network switches, and optical modules. The company aims to meet the rising demand driven by the global expansion of AI data centers.

The investment is split between domestic expansion and a new facility in China. Doosan will spend 420 billion won to upgrade its existing lines in South Korea for optical module materials. An additional 550 billion won will fund a new plant in China, specifically designed to produce materials for AI accelerators and network switches. Operations at the new sites are expected to begin in the second half of 2028.

Strategic production split between Korea and China

Doosan has strategically divided its manufacturing base to optimize for different product requirements. The South Korean facility will focus on copper-clad laminates for optical modules. This location allows the company to leverage specialized personnel and maintain strict quality control, which is crucial for protecting core technologies. By keeping this production domestic, Doosan can ensure high precision for components that require tight tolerances.

The Chinese plant is positioned to serve major global printed circuit board manufacturers. Being located near these key customers allows Doosan to respond more quickly to shifting demand and reduce logistical delays. This proximity is a trade-off, as it moves some production capacity to a region with different regulatory and geopolitical dynamics, but it offers significant efficiency gains for high-volume components.

Material science drives AI hardware performance

Copper-clad laminate is a composite material that bonds copper foil to an insulating substrate. It serves as the foundation for printed circuit boards, enabling high-frequency signals to travel with minimal loss. As AI accelerators process data at increasing speeds, the materials must support higher bandwidth and denser integration. Doosan’s technology is designed to transmit ultrahigh-speed signals reliably, a critical requirement for modern AI infrastructure.

The market for these advanced materials is expanding as competitors invest in similar capabilities. Major substrate manufacturers like Samsung Electro-Mechanics and LG Innotek are increasing their production capacity to meet growing AI investment. Doosan is listed as a key supplier to these firms, indicating a strong position in the supply chain. However, increased competition means that maintaining technological leadership will be essential to sustain market share.

Electronics division revenue grows rapidly

Doosan’s electronics business has seen significant growth in recent years. Revenue for its Electronics Business Group surpassed one trillion won for the first time in 2024 and is projected to reach 1.9 trillion won in 2025, an 86 percent increase. The company has also announced plans to build a new plant in Thailand as part of its broader production expansion strategy.

Despite the strong growth, the company faces the challenge of scaling operations while maintaining quality. Doosan’s leadership states that investing ahead of demand will allow them to supply required volumes on time. This proactive approach aims to build long-term trust with customers, although it requires substantial capital expenditure and carries the risk of market demand fluctuating before new facilities are fully operational.