Samsung Electro, LG Innotek bet big on dual camera demand

[THE INVESTOR] South Korea’s top two electronics parts makers -- Samsung Electro-Mechanics and LG Innotek -- are betting big on surging demand for dual-camera smartphones.

The parts units of Samsung and LG have been somewhat struggling in recent months amid cost-cutting pressure from smartphone manufacturers in a saturated market. But as their clients are focusing more on premium features especially on cameras, their dual-camera module business are recently gaining a fresh momentum.
 

Dual-camera smartphones have two camera modules, with each of them working alone or together to improve camera functions.

LG Electronics has adopted the upgraded cameras into its premium smartphones. The latest G5 features a 16-megapixel camera with a standard lens and an 8-megapixel camera with a wide-angle lens. LG Innotek supplies the modules.

LG Innotek is also said to be supplying its dual-camera modules to the upcoming Apple iPhone 7 that comes out in September. It recently decided to build a new camera module plant in Vietnam due to a possible surge in iPhone demand.

“Except orders from LG Electronics, LG Innotek is expected to supply 31.2 million dual-camera modules in the latter half of this year. Compared to single-camera modules, profits from dual-camera modules are more than double,” said Park Hyoung-woo, an analyst at SK Securities.

Samsung Electro-Mechanics is also expected to benefit next year as the next Galaxy S phone, tentatively called Galaxy S8, is widely expected to adopt a dual camera for the first time.

The company plans to start supplying dual-camera modules to Chinese handset makers in the latter half of this year.

“Dual cameras will make up almost one-third of the company’s total sales next year,” said Lee Soo-hak, an analyst at Hanwha Investment and Securities.

By Lee Ji-yoon (jylee@heraldcorp.com">jylee@heraldcorp.com)