LG InnoTek has posted higher than expected earnings in the second quarter of 2020 thanks to its camera module supply for Apple’s iPhone SE and strong performances of its semiconductor and display substrate businesses.
The company posted 42.9 billion won in operating profits and sales of 1.5399 trillion won in the second quarter, the company said Wednesday. It is a rise of 128.7% and 1.2%, respectively.
The performance beats South Korean analysts’ consensus of an operating profit of 21 billion won and sales of 1.47 trillion won.
Uncertainties were high for traditionally weak second quarter due to the COVID-19 pandemic but the company performed stably thanks to its globally top products, a company spokesperson said. Substrates for semiconductors and displays as well as camera module led the performance, they added.
The company’s optical solution business posted sales of 929.6 billion won, a irse of 12% year over year. Traditionally the business sees lesser demand for camera modules for the quarter but expansion of smartphones that uses high-pixel camera modules and 3D sensing modules plus a stable production management helped the perform better than market expectations.
LG InnoTek was the supplier of camera modules for the iPhone 11 last year and iPhone SE launched earlier this year. It also supplies 3D Time of Flight module for the iPad Pro. The optical solution business saw a sales rise of 100% year over year in the first quarter thanks to these deals with Apple.
Substrate materials business posted sales of 295.7 billion won, a rise of 7% year over year. Substrates for telecommunication semiconductors and tape substrate and photo masks for premium TV displays helped the growth, LG said.
Its auto-component business marked 232.9 billion won in sales, a decline of 12% year over year. This was due to lowered demand from automobile firms from the effects of the COVID-19 pandemic. However, sales of power modules such as batter management systems and DC-DC converters increased during the quarter.
LG InnoTek also announced fresh investments of 127.4 billion won to expand its production capacity for telecommunication semiconductor substrates at its Gumi factory line. The substrates are used to put all telecom chips on one substrate and connect it with main board of mobile devices. It is used large integration semiconductor packages and designed to be ultra-thin. The investment will last from Wednesday to June 30 of next year.