Samsung Electro-Mechanics reviewing entering mid-tier camera market

Samsung Electro-Mechanics was considering entering the camera module market for mid-end smartphones, the company said in its conference call for second quarter earnings on Tuesday.

Demand for multi-camera modules was on the rise in mid-end smartphones and demand for high resolution and optical zoom will increase, company vice president Bae Kwang-wook said. 

Samsung was reviewing entering the high-resolution camera module market for mid-end smartphones and it will secure price competence to expand the business, Bae said. This comment is likely referring to the fact that Samsung Electro-Mechanics could supply high-resolution camera modules for Samsung Electronics’ Galaxy A series of smartphones.

There has been speculations that the company could enter the camera module market for mid-end phones due to the slowdown in sales of premium phones. Samsung Electronics is planning to apply optical image stabilization, which was considered a premium feature, to its 2021-model Galaxy A series.

Samsung Electro-Mechanics has supplied camera modules for premium smartphones such as Galaxy S and Galaxy Note but demand has fallen due to poor sales. The component maker will likely differentiate its mid-tier offering by applying high-resolution, zoom and slimmer design for the camera modules.

Meanwhile, there was no mention of Apple during the conference call. There has been speculations that Samsung Electro-Mechanics could supply the lens for iPhones launching later this year. 

Samsung also reiterated that its new multi layer ceramic capacitor (MLCC) factory in Tianjin, China will not start in the second half of the year. The company said earlier that construction of the factory has been delayed due to the COVID-19 pandemic.

Bae said the company will wrap up construction and equipment installation for the factory by the end of the year. The vice president said the Tianjin line was very flexible and can produce MLCC for both automobile and IT applications. If there were demand from IT, the factory could start operations in the second half of the year.

MLCC demand from cars remained weak but Bae said the company expects a recovery in the third quarter. However, due to the US-China trade war and COVID-19 pandemic, normalization of the market will take awhile, he added.

Samsung Electro-Mechanics posted 96 billion won in operating profits and 1.8122 trillion won in the second quarter, a decline of 41% and 5%, respectively, from a year ago. Its component solution business, which produces MLCC, saw sales increase 7% from a year prior. Its module solution business saw revenues drop 27% year over year to 604.8 billion won. Its substrate solution business saw sales rise of 20% from a year prior to 367.8 billion won.