CrucialTec supplies fingerprint recognition modules for Samsung smartphones for the first time

It has been confirmed recently that CrucialTec, a component maker, supplied the first batch of fingerprint recognition modules for mid- to low-end smartphones from Samsung Electronics. CrucialTec has been growing with Chinese smartphone companies, its main customers.

CrucialTec has supplied camera flash modules and camera windows to Samsung Electronics. But this is the first time for them to supply fingerprint recognition modules for smartphones. As a domestic client, CrucialTec was the main supplier of fingerprint recognition modules for LG Electronics smartphones. However, LG Electronics' smartphone sales volume slumped, causing the sales volume of CrucialTec to be led by the supplies to China's smartphone makers such as Huawei.

CrucialTec's entry into the supply chain of fingerprint modules for Samsung's smartphones seems to be related to Samsung Electronics' strategy of ‘Local-Specialized Production of Various Products.’ In the second quarter of this year, Samsung Electronics launched the same number of new smartphone products as the number launched last year. It also released products such as 'Galaxy M', a product in the range of 100,000 won. Thus, it is expected that the company will diversify the supply chain to improve profitability.

A CrucialTec official said, "Competition in the Chinese market is fierce, so we plan to concentrate on the domestic market this year. The initial supply does not guarantee more orders. Companies must compete for the orders." Domestic companies like DreamTech and Partron are supplying fingerprint recognition modules for smartphones to Samsung Electronics.

The fingerprint recognition module for Galaxy S10's, the premium smartphone model released by Samsung Electronics last month, is known to have been supplied by Taiwan GIS and OFILM China. A CrucialTec official said, "The sales volume is much higher for mid-priced models than the premium models. As a component supplier, our profit improves when the supply volume increases, which causes the sales to increase.”

CrucialTec's earnings have been steadily declining since its peak in 2016. The company recorded sales of 320 billion won and an operating profit of 8.3 billion won in 2016. In 2017, sales amounted to 172.7 billion won, followed by sales of 83.6 billion won last year. After turning to the deficit with an operating loss of 39.5 billion won in 2017, the company recorded an operating loss of 29.9 billion won last year.

CrucialTec announced the ‘Signing of a contract of equity security provision including the largest shareholder change’ last month by CEO Ahn Gun-Joon, the largest shareholder. The secured amount is 5 billion won. It is a contract that reduces CEO Ahn’s holding stake of 8.68% to 0.35%. The stake owned by CrucialTec's largest shareholder (CEO Ahn) has been decreasing from its 22% standing at the end of 2014, 19% at the end of 2015 and 2016, 15% at the end of 2017, to 8% at the end of 2018.