LG Innotek Q2 Operating Profit 42.9 Billion KRW...Driven by Semiconductor and Camera Module Performance (Comprehensive)

Sales of 1.5399 Trillion KRW, Up 1.2% YoY
New Investment of 127.4 Billion KRW in Semiconductor Substrates for Telecommunications

[Asia Economy Reporter Dongwoo Lee] LG Innotek announced on the 22nd that its consolidated operating profit for the second quarter of this year was tentatively estimated at 42.9 billion KRW. This represents a 128.7% increase compared to the same period last year.

Sales reached 1.5399 trillion KRW, up 1.2% year-on-year. Net profit turned positive at 7.6 billion KRW. LG Innotek's second-quarter performance this year exceeded the securities firms' average estimates of 1.4709 trillion KRW in sales and 32 billion KRW in operating profit.

By business division, the Optical Solutions division recorded sales of 929.6 billion KRW, a 12% increase year-on-year but a 30% decrease compared to the previous quarter. The expansion of product lineups such as high-pixel camera modules and 3D sensing modules, along with stable production management, resulted in better-than-expected performance despite market concerns.

The Substrate Materials division posted sales of 295.7 billion KRW, up 7% year-on-year and 2% quarter-on-quarter. Globally leading products such as communication semiconductor substrates, tape substrates applied to high-resolution display devices, and photomasks continued steady growth following the previous quarter.

The Automotive Components division recorded sales of 232.9 billion KRW, down 12% year-on-year and 18% quarter-on-quarter. LG Innotek analyzed that the decline was largely due to reduced demand for automotive components amid the global automotive market downturn caused by the spread of COVID-19. However, sales of vehicle power modules such as battery management systems (BMS) and DC-DC converters, which are key components for electric vehicles, increased.

LG Innotek stated, "Despite the seasonal off-season in the second quarter and the ongoing COVID-19 pandemic causing significant market uncertainty, we achieved stable results centered on globally leading products. Semiconductor and display substrates with differentiated technology and quality competitiveness, along with smartphone camera modules, drove our performance."

On the same day, LG Innotek also announced a new facility investment plan worth 127.4 billion KRW. This investment aims to expand production capacity for communication semiconductor substrates. The company plans to actively respond to the anticipated increase in demand and solidify its global top position.

Communication semiconductor substrates are components that mount semiconductor chips with communication functions onto a single substrate and connect them to the main board inside mobile devices to ensure optimal performance. As they are used in highly integrated semiconductor packages, these substrates are extremely thin and precisely designed advanced substrates.

This investment will be used to expand production lines at the Gumi plant, the core base of the Substrate Materials division, and is expected to contribute to revitalizing the local economy in the Gumi region. The investment period is from July 22 to June 30 of next year.

This content was produced with the assistance of AI translation services.