THE KOREA ECONOMIC DAILY, GLOBAL EDITION

LG Innotek Co. and Samsung Electro-Mechanics Co., two major South Korean suppliers for Apple’s iPhone, on Wednesday reported more than a 60% plunge in fourth-quarter operating profit, weighed by the disrupted production of the iPhone 14 at its main assembler Foxconn in Taiwan.

Operating profit at LG Innotek was 170 billion won ($140 million) in the last quarter of 2022, down 60.4% from the year prior. It was sharply below the market consensus of 411.2 billion won.

Despite the disappointing quarterly profit, revenue increased 14.4% on-year to 6.5 trillion won. For all of 2022, it reported its largest-ever sales of 19.6 trillion won.

LG Innotek produces camera modules installed on iPhones. Particularly, it is the exclusive supplier of sensor-shift optical image stabilization (OIS) for iPhones. Sensor-shift OIS helps the camera stabilize an image.

Samsung Electro-Mechanics supplies camera lenses and multilayer ceramic capacitors (MLCCs) used to store and supply electricity.

Samsung’s operating profit tumbled by 67.4% on-year to 101.2 billion won in the October-December quarter. Sales declined 17.4% to 2 trillion won during the period.

Its full-year operating profit dwindled by 20.4% on-year to 1.2 trillion won last year, hit by reduced demand for electronic devices after COVID-19 struck.

With little signs of a recovery in demand for smartphones and computers, Samsung will boost its automotive parts business and expand its customer base this year, the company said at a conference call on Wednesday.

Meanwhile, LG Innotek will increase the production of flip chip ball grid array (FC-BGA) packages, or high-density package substrates this year, its Chief Executive Jeong Cheol-dong told The Korea Economic Daily earlier this month.

An FC-BGA is used to produce semiconductor modules, on which memory chips, a central processing unit and a graphic processing unit are assembled.

The high-performance substrate is called the Hermes of the semiconductor sector because of its high price tag.

Both LG and Samsung are competing for substrates used in a next-generation chip to be built on Mac tablets for machine learning as well.

Write to Ji-Eun Jeong at jeong@hankyung.com
Yeonhee Kim edited this article