LG Innotek and Samsung Electro-Mechanics both achieves record-breaking performances last year, and invested their largest amount ever in R&D. Their strategy is to secure the world's highest level of differentiated competitiveness in major component markets, such as semiconductor substrates and camera modules. This year, the two companies are expected to break their best performance record by pouring into R&D expenses that exceed last year's level.
 
According to LG Innotek's business report on the 20th, a total of 564.3 billion won was spent on R&D last year. This is an 18% increase from last year (474.3 billion won). This is the largest amount that LG Innotek has invested in R&D expenses in its history.

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Samsung Electro-Mechanics invested 567.1 billion won in R&D last year. This is a 23% increase from the previous year (460.5 billion won). It is the largest annual R&D expense in Samsung Electro-Mechanics' history.
 
The reason why both companies historic R&D investments last year was because they had enough room for reinvestmentdue to rising total sales.
 
LG Innotek earned 14.9456 trillion won in annual sales and 1.2642 trillion won in operating profit last year. Last year LG Innotek achieves their highest ever sales and operating profit, and it was the first time they exceeded 1 trillion won in operating profit
 
Samsung Electro-Mechanics recorded 9.675 trillion won in sales and 1.4869 trillion won in operating profit last year. Compared to the previous year, sales and operating profit rose 25% and 63%, respectively. Both sales and operating profit are all-time highs. Samsung Electro-Mechanics' sales exceeded 9 trillion won for the first time. Operating profit surpassed the 1 trillion won mark for the first time in three years since 2018.

As LG Innotek and Samsung Electro-Mechanics recorded betterthanexpected results last year, the proportion of R&D expenses in total sales remained at the same level as the previous year or decreased slightly.
 
Samsung Electro-Mechanics spent 5.9% of its total sales last year on R&D. The same level as last year. LG Innotek invested 5% of its total sales into R&D in 2020, but the percentage decreased to 3.8% last year.
 
As LG Innotek and Samsung Electro-Mechanics performed better than expected last year, the proportion of R&D expenses in total sales remained at the previous year's level or slightly decreased.
 
Samsung Electro-Mechanics spent 5.9 percent of its total sales last year on research and development. This is the same level as the previous year. LG Innotek invested 5% of its total sales in R&D expenses in 2020, but its share decreased to 3.8% last year.
 
With the expansion of their R&D, LG Innotek and Samsung Electro-Mechanics now possess the world's highest level of competitiveness in the component groups that each company focuses on, such as semiconductor substrates, multi-layer ceramic capacitors (MLCCs), electronic parts, and camera modules.

MLCCs, which are responsible for a significant portion of Samsung Electro-Mechanics' sales, is narrowing the technology gap with Japan's Murata, the global leader in MLCCs. Samsung Electro-Mechanics established a task force (TF) composed of experts in each field, including materials, processes, and facilities, to secure MLCC super-gap technology. They are focusing on producing the world's leading products. In the semiconductor substrate field, Samsung Electro-Mechanics is strengthening their competitiveness by investing in high-value-added substrate flip-chip (FC)ball grid array (BGA) facilities, while demand is skyrocketing. Samsung Electro-Mechanics operates an organic R&D organization with the central research center, business division research center, global manufacturing center, and innovation center at its core.
 
LG Innotek has unrivaled global competitiveness in the field of camera modules. Camera modules account for 77% of LG Innotek's annual sales.

LG Innotek invested 1.561 trillion won in new optical solutions earlier this year. They also recently invested 413 billion won in the FC-BGA field to strengthen their high value-added substrate business. Further investments are expected to continue in the future. LG Innotek is operating six research institutes including Convergence Components Research Center, Device Materials Research Center, Base Technology Research Center, Motor Research Center, Substrate Materials Research Center, and Optical Solution Research Center.

By staff reporter So-ra (Parksrpark@etnews.com)