(C) LG Innotek

LG Innotek, a global material and component manufacturer, announced on the 10th (December 10, 2025) the successful development of its 'Next-Generation Smart IC (Integrated Circuit) Substrate,' a product designed to significantly reduce carbon emissions by half compared to conventional substrates.

This breakthrough utilizes a novel material that eliminates the need for precious metal plating, addressing both environmental concerns and the high cost associated with traditional manufacturing processes. The move is strategically timed to meet the intensifying environmental regulations, particularly in the European market, which is a key region for smart card adoption.

 
Innovation for Sustainability: A Plating-Free Approach

The Smart IC Substrate is an essential component for mounting the IC chip, which contains personal security information, onto smart cards such as credit cards, electronic passports, and USIMs. Its function is to reliably transmit the chip's information as electrical signals to a reader (like an ATM or passport scanner) upon contact.

Historically, the manufacturing of these substrates required a crucial plating process using precious metals like palladium and gold. This step was necessary to prevent surface corrosion when contacting the reader and ensure stable electrical signal transmission. However, the extraction of palladium and gold generates substantial amounts of greenhouse gases and contributes to high production costs.

LG Innotek's innovative solution applies a new material that achieves high performance without this precious metal plating step—a first in the industry.

Carbon Reduction: LG Innotek estimates that the Next-Generation Smart IC Substrate will reduce annual carbon dioxide emissions by 8,500 tons. This is equivalent to planting approximately 1.3 million trees.
Cost Efficiency & Durability: By removing the need for expensive precious metals, manufacturing costs are lowered. Furthermore, the product’s durability has been strengthened by about three times compared to the existing substrate. This enhanced durability minimizes data recognition malfunctions caused by frequent external contact and long-term use of smart cards.

Strategic Timing Amidst Global Environmental Shifts

The development comes at a critical time as environmental, social, and corporate governance (ESG) standards are increasingly emphasized globally, and strict environmental regulations are taking effect, especially in Europe. The European Union, a major consumer market for smart cards, is pushing for circular economy principles and stricter standards on the use of materials.

Smart cards are broadly categorized into contact and contactless types, but the smart IC substrate is typically used in contact-type applications where physical contact with the reader is necessary. The global demand for these components remains robust, driven by the expansion of digital identification, financial services, and mobile communications. The ability to offer an "eco-friendly" and "high-durability" product provides LG Innotek with a strong competitive edge in this mature yet evolving market.

The company plans to accelerate its market penetration with this Next-Generation Smart IC Substrate, capitalizing on the growing demand from major customers in Europe who are seeking more sustainable supply chains. The technology positions LG Innotek not just as a component supplier, but as an environmentally responsible innovator in the electronic materials sector.

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