LG Innotek invests in about $500 million to iPhone’s camera module

In February 2021, several media including South Korean news media, Pulse, reported that LG Innotek Co., which is a LG Group`s component making affiliate, will invest in about $500 million to expand production lines for more camera modules. This is because the company tries to respond to the increase of demand from its core customer Apple Inc.

It is also reported that the capex plan will be 547.8 billion won ($493.6 million) that has already approved by the board and it represents over 70 percent of the company’s revenue (9.54 trillion won) last year.

LG Innotek, which is a major supplier of iPhone camera modules, did not provide any details at all by itself. However, in the report, it seems that lines could be responsible for producing Sensor Shift stabilization, 3D Structured Light sensing and ToF (Time of Flight) sensor modules.

Sensor Shift is a new sensor that uses optical stabilization system and it is currently available with the iPhone 12 Pro Max camera. This new technology is expected to be applied to all iPhone 13 models. The ToF sensor is used to reconstruct objects in 3D, and Apple has applied more ToF sensors to iPads and iPhones.

Who is LG Innotek?

LG Innotek is a South Korean electronic components company and it was founded in 1970. Now it becomes a leading global materials and components company by diversifying business areas and focusing on creating high quality products through constant technological development and process innovation.

The company supplies global customers such as Apple (as we see) with key materials and components in the fields of smartphone, display, semiconductor, automobile, and the Internet of Things (IoT). These products are developed and produced in their both local and global facilities. In fact, LG Innotek is a global leading supplier for smartphone camera modules, substrates and photomasks for displays, and semiconductor substrates for communications. The South Korean electronics giant will continue to expand new products and businesses through differentiated technological development and convergence of technologies so that the company can achieve their vision, to become the “Global No.1 Material and Component Company.”

The current situation in the smartphone market

As we can see the other article about Huawei to sell its youth brand, the Chinese telecom giant has already decided to let Honor brand go. The company sold more than 70 million smartphones as Honor brand and this decision has a huge impact on the smartphone market. Let us look the number in more detail.

In 2018, Huawei sold more than 200 million smartphones and the number was highest (almost 240 million) in 2019. However, due to the trade war, the number became around 189 million in 2020 and it will be almost 80 or 90 million in 2021. Huawei’s struggle in the smartphone market is quite obvious, but it means other smartphone manufacturers have an opportunity to increase their market share. In the high-end model, Apple and Samsung gains market share. On the other hand, in the low-end model, Chinese new smartphone makers such as Xiaomi, Oppo and Vivo, take more actions.

However, as we see how stagnant smartphone industry is in the other article, each smartphone maker tries to differentiate itself from competitors. One of the key differentiating factors is the quality of cameras. This is because other features such as displays become commoditization so that the quality of cameras is getting more important and crucial. Therefore, we can conclude that the decision in LG Innotek reflects the all trends in the current smartphone market.