LG Innotek and Samsung Electro-Mechanics Set to Continue Their Positive Growths in 2018

Jan 11, 2018

LG Innotek and Samsung Electro-Mechanics, which made positive performance in 2017, will look to continue their growths in 2018 as well. It is understood that both of these businesses are looking to make between $6.55 billion and $7.49 billion (7 trillion KRW and 8 trillion KRW) in sales this year.
According to industries on the 10th, it is heard that LG Innotek made more than $6.55 billion (7 trillion KRW) in sales last year while Samsung Electro-Mechanics made more than $6.08 billion (6.5 trillion KRW) in sales last year. Although their performance for the fourth quarter has not been made public yet, LG Innotek made $4.49 billion (4.8 trillion KRW) in sales between the first and the third quarter of 2017 and it is estimated to have made more than $6.55 billion in annual sales as amount of supply of its camera modules and 3D sending module for face-recognition to Apple increased during the fourth quarter. Samsung Electro-Mechanics made $4.77 billion (5.1 trillion KRW) in sales between the first and the third quarter of 2017 and it is estimated to have made more than $6.08 billion as it constantly made about $1.40 billion (1.5 trillion KRW) in sales every quarter of 2017. These sales are their biggest sales within past three years.
Positive performance by LG Innotek and Samsung Electro-Mechanics, which are the two biggest electronic parts manufacturers in South Korea, is a result of an upgrade of Smartphone parts. They recorded positive performance from camera module, which is their main businesses, as supply of dual-cameras has started to expand on full-scale in 2018. LG Innotek showed even bigger growth than 2016 as it started to supply face-recognition modules to Apple. Samsung Electro-Mechanics clearly benefited from a boom as there has been strong demands for MLCC (Multi-Layer Ceramic Capacitor), which is a necessary part for electronic devices, that resulted in lack of supplies.
It will be interesting to see whether both of these businesses can continue their positive growths in 2018 as paradigm of electronic parts continues to change. Both of these businesses are optimistic about their growths and set their management plans higher than last year. It is understood that LG Innotek’s goal is to make later-end of $6.55 billion (7 trillion KRW) in sales while Samsung Electro-Mechanics’ goal is to make middle or later-end of $6.55 billion.
It is expected that camera module will be at the center of their growths for 2018 as well. LG Innotek decided to invest about $749 million (800 billion KRW) into its facilities as it is predicting that amount of supply of camera modules and 3D sensing modules for Apple will increase. It is heard that Apple will increase use of dual-cameras and 3D sensing modules for its next models. Samsung Electro-Mechanics is also scheduled to supply its dual cameras for Galaxy S9, which is Samsung Electronics’ next strategic Smartphone. Although it is already supplying dual-cameras for Galaxy Note 8, Galaxy S series are the flagship models that have most sales volumes within Samsung Electronics. As a result, it is expecting that positive performance from supplies will be the greatest. On top of this, Samsung Electro-Mechanics is expecting growth from all of its businesses as strong demands for MLCC continue this year and supply of RFPCB (Rigid Flexible Printed Circuit Board) for Apple and supply of next-generation SLP (Substrate Like PCB) for Galaxy S9 become regularized.
It is also interesting to see whether they can break their all time records. LG Innotek made $6.05 billion (6.4661 trillion KRW) in sales in 2014 which is its highest ever. LG Innotek looks to break its 2017 performance and write a new history in 2018. Although it will be difficult for Samsung Electro-Mechanics to break its current record, which was made in 2013 when it made more than $7.49 billion (8 trillion KRW), this year, it is expecting that there will be a huge growth within its businesses this year.
CEOs from LG Innotek and Samsung Electro-Mechanics emphasized strengthening of their competitive edge in their main businesses and promotion of their new businesses.
“We need to focus on promoting our growing businesses such as camera modules and automotive parts and secure stable profit structures for substrate materials, LED, and electronic parts.” said President Park Jong-seok of LG Innotek at New Year’s Address. At the same time, he also emphasized promotion of new growing businesses to prepare for the future.
“We need to clearly increase our competitive edge for our main businesses and have this year as the first year for real growth of new businesses based on PLP (Panel Level Packaging).” said President Lee Yoon-tae of Samsung Electro-Mechanics. “Let us grow one more step and become world’s greatest component manufacturer.”
Staff Reporter Yoon, Keonil | benyun@etnews.com

■Trend of sales of LG Innotek and Samsung Electro-Mechanics
▲LG Innotek ∆2014: $6.01 billion (6.4661 trillion KRW) ∆2015: $5.71 billion (6.1381 trillion KRW) ∆2016: $5.35 billion (5.7546 trillion KRW) ∆2017 (estimate): more than $6.55 billion (7 trillion KRW) ∆2018 (goal): later-end of $6.55 billion (7 trillion KRW) 
▲Samsung Electro-Mechanics ∆2014: $5.67 billion (6.1004 trillion KRW) ∆2015: $5.74 billion (6.1763 trillion KRW) ∆2016: $5.61 billion (6.033 trillion KRW) ∆2017 (estimate): more than $6.08 billion (6.5 trillion KRW) ∆2018 (goal): middle or later-end of $6.55 billion (7 trillion KRW)
Reference: Combination of information from industries
<■Trend of sales of LG Innotek and Samsung Electro-Mechanics ▲LG Innotek ∆2014: $6.01 billion (6.4661 trillion KRW) ∆2015: $5.71 billion (6.1381 trillion KRW) ∆2016: $5.35 billion (5.7546 trillion KRW) ∆2017 (estimate): more than $6.55 billion (7 trillion KRW) ∆2018 (goal): later-end of $6.55 billion (7 trillion KRW) ▲Samsung Electro-Mechanics ∆2014: $5.67 billion (6.1004 trillion KRW) ∆2015: $5.74 billion (6.1763 trillion KRW) ∆2016: $5.61 billion (6.033 trillion KRW) ∆2017 (estimate): more than $6.08 billion (6.5 trillion KRW) ∆2018 (goal): middle or later-end of $6.55 billion (7 trillion KRW) Reference: Combination of information from industries >

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