Benefiting from New Smartphone Releases
Samsung Electro-Mechanics and LG Innotek, the two largest electronic component manufacturers in South Korea, are showing a noticeable performance improvement in the second half of this year. This is because their camera module and semiconductor substrate sales are growing fast after Apple and Samsung Electronics as their major clients recently released new smartphones.
LG Innotek announced on Oct. 29 that its third-quarter sales and operating profit totaled 2,445.9 billion won and 186.5 billion won, respectively. Those are the highest third-quarter figures in its history and the operating profit soared by no less than 893.6 percent from the previous quarter. The sales and profit increased by 5.7 percent and 43.8 percent from a year earlier, respectively.
This has to do with the new iPhones released in the second half. LG Innotek’s optical solution division is supplying Apple with multiple camera modules and 3D sensing modules and the division’s sales added up to 1,682.4 billion won with a quarter-on-quarter increase of 103 percent. Likewise, the sales of the company’s substrate material division increased approximately 10 percent to 305.9 billion won based on advanced semiconductor components and those for use in high-resolution mobile displays.
Samsung Electro-Mechanics posted an operating profit of 180.1 billion won in the third quarter, more than 10 percent higher than previous market expectations. This has to do with the recent release of new Samsung Galaxy smartphones.
The sales and profit growth of both companies is likely to continue for a while. With the era of 5G communications around the corner, Samsung Electro-Mechanics’ multilayer ceramic capacitor sales are expected to soar and LG Innotek’s next-generation auto parts development is likely to speed up. In the third quarter, the latter started the mass production of vehicle motors and new products for use in electric, connected and self-driving vehicles and the sales of its automotive electronics division reached 293.4 billion won, up 22 percent from a year ago and up 11 percent from the previous quarter.