LG Innotek operating profit at 444.8 billion KRW
Pulled by smartphone camera modules
Samsung Electro-Mechanics sales at 2.3837 trillion KRW
Impact of IT set slumps, inventory adjustments, etc
As the smartphone market faces a downturn, the two giants of the parts industry in Korea have opposite results in the 3rd quarter. LG Innotek focused on high-end model parts for Apple’s iPhone and had the greatest 3rd quarter results to date. Hit directly by the downturn in the IT industry and the shrinking of the Chinese smartphone market, Samsung Electro-Mechanics struggled. This was the first time that the differences in quarterly sales were more than double.
According to the industry on the 26th, LG Innotek and Samsung Electro-Mechanics had opposite 3rd quarter results.
LG Innotek recorded their greatest 3rd quarter results with 5.3874 trillion KRW in sales, and 444.8 billion KRW in operating profit. This is the second time in history that they passed 5 trillion KRW in quarterly sales since the 4th quarter of last year. Compared to the same period last year, their sales went up by 41.9%, and operating profit went up by 32.5 profits.
A spokesman of LG Innotek said, “Beginning to seriously mass produce the new model of our client to supply high-performance smartphone camera modules led to the results,” and went on to say, “In addition to 5G communication semiconductor substrates, the sales of all product lines, including communication modules for cars, and power and electronic equipment parts for EVs, all had a rise in sales and supported the rise in results.”
The optical solution business recorded sales of 4.4395 trillion KRW, a 48% rise compared to the same period last year. The release of a new model from their client in September had a huge rise in supply.
The substrate material business recorded 435.6 billion KRW in sales, a 3% rise compared to the same period last year. The expanded supply from their client’s new model let to the continued rise in sales of the 5G communications semiconductor substrates. Display parts like tape substrates and photomasks were weaker due to a decrease in demand from downstream industries.
The electronic equipment parts business recorded 380.8 billion KRW in sales, a 48% rise compared to the same period last year, and a 15% rise compared to the previous quarter.
Samsung Electro-Mechanics recorded 2.3837 trillion KRW in sales and 311 billion KRW in operating profit in the 3rd quarter on a consolidated basis. Compared to the same period last year, their sales went down by 6%, and their operating profit dropped by 32%. Compared to the previous quarter, their sales went down by 3% and their operating profit dropped by 14%.
The 3rd quarter sales of the component category, of which multilayer ceramic capacitators (MLCC) are at the core, sales were recorded at 929.8 billion KRW. Due to the impact of a slump in IT set demands and inventory adjustments, they dropped 30% compared to the same period last year and dropped by 18% compared to the previous quarter. Electronic equipment parts were relatively good due to the diversification of clients.
Due to expansion in supply of high-performance camera modules for new flagship smartphones and high-reliability camera modules for electronic equipment, the optical communication solution category recorded 901.4 billion KRW in sales, a 14% rise compared to the same period the previous year and 16% rise compared to the previous quarter.
Due to the expansion in supply of 5G, network, and electronic equipment package substrates, the 3rd quarter sales of package solutions recorded 552.5 billion KRW, a 26% rise compared to the same period last year, and a 3% rise compared to the previous quarter.
There is a possibility that the gap between the two companies in the 4th quarter may widen. Typically, LG Innotek usually records their best results in the 4th quarter due to the impact of their client. With the launches of their key clients’ products being grouped around the 1st quarter, Samsung Electro-Mechanics is likely to be affected by the year-end slow season.
By Staff Reporter Sora Park (srpark@etnews.com)