Dependence on Apple Excessive
LG Innotek's sales to Apple amounted to more than 15 trillion won in 2022, accounting for 77 percent of the company’s total sales.
According to the 2022 business report released by LG Innotek on Feb. 23, sales to a single customer which accounted for more than 10 percent of its total sales in 2022 reached 15,129.1 billion won.
LG Innotek does not disclose the name of the customer, but this customer is presumed to be none other than Apple. Its sales to Apple climbed by 35.2 percent compared to 11,192.4 billion won in 2021.
LG Innotek’s sales began to soar when Apple applied a dual camera to the iPhone X (Ten) in 2017. Since then, its sales to Apple have been surging over the past five years – 4,656.3 billion won in 2018, 5,126.1 billion won in 2019, 6,461.8 billion won in 2020 and 11,192.4 trillion won in 2021. The percentage of its sales to Apple in its total sales also inflated from 58.3 percent in 2018 to 77.2 percent in 2022.
The strong partnership between LG Innotek and Apple is highly likely to expand further in the future. LG Innotek exclusively supplies folded zoom camera modules for the iPhone 15. Industry insiders believe that LG Innotek’s sensing modules can go into mixed reality (MR) devices that Apple plans to release in 2023. The Korean parts supplier sells Apple sensing modules for Face ID, a facial recognition function that recognizes users, and Time of Flight (ToF) modules that set focuses on images.
Concerns have been raised about Apple’s excessively high proportion in LG Innotek’s total sales. LG Innotek posted 11.4 billion won in operating loss in the first quarter of 2019. The big drop in the operation loss was blamed largely on a sharp decline in camera module sales following Apple’s sluggish iPhone sales.
Accordingly, LG Innotek is seeking to diversify its customers by investing in flip chip-ball gray array (FC-BGA) substrates, a next-generation semiconductor package substrate. Moreover, it plans to increase sales to the automotive electronics industry, such as Tesla’s next-generation electric truck Cybertruck.