South Korean printed circuit board (PCB) companies have posted mixed results for the first quarter for 2020, with those relying on smartphones seeing their earnings tank.
However, those supplying PCB for semiconductors saw their earnings increase, which will likely carry over to the second quarter.
LG InnoTek’s substrate material division posted sales of 289.6 billion and operating profits of 50 billion won in the first quarter, a rise of 12.7% and 119%, respectively, from a year prior.
The company currently supply substrate for semiconductors for Avago Technologies __ which recently acquired Broadcom __ and Skyworks.
LG InnoTek also exited its High Density Interconnection (HDI) business for smartphones last year, which contributed to profitability.
Meanwhile, Samsung Electro-Mechanics’ substrate material division posted revenues of 383.7 billion won, a rise 10% from a year ago. Operating profits, however, was 7.6 billion won.
Like LG, Samsung benefited from demand from semiconductor vendors but saw decline in rigid-flexible printed circuit boards (RFPCB) used in smartphones.
Simmtech turned to the black thanks to reduction of losses from its Japanese subsidiary Simmtech Graphics. The subsidiary saw strong demand in GDDR6 for game graphic cards.
Daeduk Electronics is also expected to see solid profits in the first quarter, people familiar with the matter said. It moved less units than expected for its RFPCB used in the camera module of Samsung Electronics’ Galaxy S20 series.
However, PCB used for semiconductors was in high demand, they said.
Korea Circuit, which relies on PCB aimed at smartphones, saw revenues of 161.5 billion won, a rise of 17.2%. It also turned to the black. However, it was less than the market consensus.
The company was expected to benefit more from Samsung Electro-Mechanics’ exit from HDI business for smartphones, filling in the vacuum.
DAP Corporation, meanwhile, saw a 160% boost in operating profits and 18.8% in revenue. The company supplies its HDI substrate to Samsung Electronics for the latter’s Galaxy S20 series.
DAP mostly supplied its goods for use in Samsung’s low- to mid-tier models but began supplying them for high-end models as well, beginning this year.
BH and Interflex, which relies of Samsung smartphones, also saw poor performances. Both companies supply RFPCB used in the Galaxy S20 Ultra smartphone.
Second quarter results are expected to be similar to the first, with continued strong demand from semiconductors. Those from smartphone will likely stay flat due to COVID-19.
Samsung has effectively stopped orders for more boards since March due to the virus outbreak.
PCB companies are looking to the third quarter for a return to form: Samsung Electro-Mechanics, BH and YP Electronics are expected supply their RFPCB for Apple’s next iPhone launching later this year.
