LG Innotek is expected to develop a triple camera to be installed on Apple’s iPhone this year.
On the 15th, LG Innotek announced new facility investment of 282.1bn won. The investment targets the mobile camera module, and the investment objective is to strengthen its competitiveness in the optical solution business and to respond to the market demand. The investment period is from February 15th to December 31st this year.
Security analysts believe the new facility investment is for mass production of the new iPhone triple camera module.
Park Kang-Ho, a researcher at Daeshin Securities, said, “The new facility investment is estimated to be for the triple camera. The strategy would be to secure a competitive advantage if its global strategic customer (Apple) adopts triple camera for its new smartphone model in the second half of 2019.” In addition, he mentioned, “LG Innotek has a history of securing a high market share in the early stages based on the technological advantage and stable yield in the past when its strategic customers were changing the camera strategy (dual camera, 3D sensing camera).”
“It is expected that LG Innotek’s strategic customer (Apple) will actively utilize a triple camera. LG Innotek will continue to lead the supply of a triple camera in a stronger position and will try to upgrade its optical solution business by focusing mainly on a triple camera,” said Kim Ji-San, a researcher at Kiwoom Securities. He added, “LG Innotek has invested 1 trillion won in optical solutions for the past two years and has been actively responding to the 3D sensor module and multi-camera adoption roadmap of overseas strategic clients.”
On the 30th of last month, Bloomberg reported that Apple is testing triple camera systems for the new iPhone this year. Bloomberg said the subsequent version of iPhone XS Max will be installed with a triple camera and the successor to the iPhone XS and iPhone XR will have a dual camera installed. According to DigiTimes, Taiwan’s Largan Precision is optimistic that its customers’ flagship smartphones this year will adopt a multi-lens over the triple lens. It plans to continue to increase production facilities. Largan Precision is the world’s largest lens maker for smartphone camera modules. The company’s product is also installed on the camera lens module for the iPhone.
LG Innotek is expected to see a dramatic earnings improvement in the second half of 2019 when the iPhone’s triple camera is installed. Securities analysts predicted that LG Innotek’s first quarter would inevitably switch to a deficit due to the sluggish new iPhone sales of last year.
Researcher Park Kang-Ho said that because LG Innotek’s sales and profits have increased in the second half of this year thanks to the supply of triple cameras, it will overcome the sluggish performance earlier this year. According to researcher Park, LG Innotek’s annual sales this year is to increase by 4.5% to 8.3 trillion won, and its operating profit will decrease by 1.7% to 259.1 billion won.
Researcher Kim Ji-San estimated, “The new model will focus on improving the camera performance while the sales of the iPhone are decreasing this year. As the increase in the sales price of the camera module will be prominent, the triple camera sales will be close to half of the optical solution sales.” Looking at the optical solution sales alone this year, it is expected to rise 8.5% year-on-year to 5,530.3 billion won.
An official of LG Innotek said, “There is no part that can be confirmed additionally about the disclosure.”