Samsung Electro-Mechanics is set to supply its camera modules to Samsung Electronics for its middle-end smartphones and expand its camera module business that has been primarily for high-end premium models towards middle-end smartphones as well.
According to the industry on October 12, it is reported that Samsung Electro-Mechanics obtained orders for main camera modules of Galaxy A72 and A52 models that are expected to be released in the first half next year.
Because the company is the “first vendor”, which has the priority over quantity of supply and timing of supply, it is scheduled to supply camera modules for about half of the entire supplies of A72 and A52 models.
Because the Galaxy A series are manufactured in large quantities and lead Samsung Electronics’ smartphone sales, it is likely that Samsung Electro-Mechanics has secured a significant supply of camera modules from Samsung Electronics.
The Galaxy A series are seen as middle-end smartphones while Galaxy S, Note, and Fold and the Galaxy M series are considered as high-end models and low-end models respectively.
Samsung Electro-Mechanics’ camera module business has been primarily for high-end models such as Galaxy S, Note, and Fold because high-end models bring back high values due to high number of pixels of cameras that go into such models and advanced features such as OIS (Optical Image Stabilization).
The reason why Samsung Electro-Mechanics decided to shift the direction of its camera module business is because demands for high-end models have been falling off.
In case of the Galaxy S20 series that were released in the first half, its sales have been the lowest out of every Galaxy S series even though it was applied with many latest technologies. The Note 20 series is also not doing much when it comes to sales due to the current COVID-19 crisis. Samsung Electronics set the annual shipments for the Galaxy S series and the Note series between 20 and 30 million units and around 10 million units respectively. Samsung Electro-Mechanics needed to take an action against stagnant demands for high-end smartphones and it decided to expand its camera module business towards middle-end smartphones as well as there has been an increase in number of middle-end smartphones that are equipped with high-performance cameras such as triple or quad cameras.
Samsung Electronics’ smartphone sales have recently been showing signs of recovery from the COVID-19 crisis. Next year’s forecast is also bright due to sanctions imposed by the U.S. Government on Huawei. This is also a positive news for smartphone parts manufacturers in South Korea.
However, it will be interesting to see how the recent decision made by Samsung Electro-Mechanics will change the dynamics of the market that has been mostly led by medium-sized companies and small and medium-sized companies such as MCNEX, Partron, PowerLogics, and CAMMSYS.
“Although increase in smartphone sales by Samsung Electronics is a positive news, competitions will only become more intense as Samsung Electro-Mechanics joins the market.” said a spokesperson for a medium-sized camera module manufacturer.
It is reported that Samsung Electro-Mechanics will begin supplying its camera modules for middle-end smartphones on full-scale starting from February next year. It will be interesting to see how much effort Samsung Electro-Mechanics puts into camera module business for middle-end smartphones.
Staff Reporter Yun, Geonil | benyun@etnews.com