LG Innotek started the production of camera modules that will go into new iPhone. Apple is the biggest customer for LG Innotek as it is responsible for large percentage of LG Innotek’s sales.
According to the industry, LG Innotek’s Optical Solution Business Department hired many short-term workers in the second quarter. According to its business report, number of workers increased from 200 at the end of March to 880 at the end of June.
It is likely that these short-time workers were hired for the manufacturing process of camera modules. LG Innotek’s Optical Solution Business Department manufactures camera modules for Smartphones.
Reason for sudden increase in number of workers is likely due to schedule supply of camera modules to Apple. Not only does LG Innotek supply camera modules to Apple, it also supplies the most camera modules to Apple.
Apple usually introduces its new iPhone in September and starts selling it sometime during October. This means that the production of new iPhone starts on full-scale sometime during third quarter.
As a result, Smartphone parts manufacturers have to begin the production of parts that will go into new iPhones before third quarter. Parts must be warehoused first before iPhones are manufactured. It is heard that LG Innotek started the production process of camera modules since August.
LG Inntek had shown a pattern of hiring many production workers according to production and release schedules of new iPhones.
Number of short-time workers of LG Innotek’s Optical Solution Business Department in 2018 increased from 612 at the end of March to 1,275 at the end of June. The number reached 3,396 at the end of September.
On the other hand, LG Innotek’s Optical Solution Business Department adjusts number of short-time workers again during fourth quarters and first quarters when number of orders is reduced.
LG Innotek supplied its dual-cameras to Apple last year and achieved great result. It made $1.91 billion (2.3132 trillion KRW) and $107 million (129.7 billion KRW) in sales and operating profit respectively in the third quarter and achieved its best third quarter performance in company’s history. Due to its positive performance in the third quarter, its annual sales in 2018, which was $6.59 billion (7.9821 trillion KRW), was its best annual sales ever.
It is heard that LG Innotek is supplying ‘triple-camera modules’ to Apple this year. Although it was heard that LG Innotek was initially responsible for development of TOF (Time-of-Flight) module with 3D sensing ability, it seems that actual application of such module has been postponed. It is predicted that TOF module will be applied to the rear-camera of Apple’s new iPhone in 2020.
Because number of camera modules that LG Innotek is supplying to Apple increased from two to three, it is estimated that the unit cost of a camera module increased as well. However, overall performance of LG Innotek will depend on how popular new iPhone is going to be as Smartphone market is going through slump as Smartphone market is going through a slump and some also predict that there will not be much change to the hardware of the new iPhone other than its camera.
LG Innotek also has to compete with other foreign camera module manufacturers. According to the industry, O-film has become the latest supplier of rear-camera module for Apple. As a result, LG Innotek has to compete with Sharp and O-film. However, it is expected that LG Innotek will remain as the main supplier due to its technical skill and production skill.
Staff Reporter Yun, Geonil | benyun@etnews.com