Riding the Wave of Galaxy Note20... Samsung Electro-Mechanics Anticipates Q3 Earnings Rebound

[Asia Economy Reporter Ki-min Lee] The launch of Samsung Electronics' premium smartphone Galaxy Note20 series is bringing a positive breeze to Samsung Electro-Mechanics, a supplier of camera modules and multilayer ceramic capacitors (MLCC).

According to industry sources on the 10th, Samsung Electro-Mechanics' camera module sales, which had been sluggish recently, are expected to rebound in the third quarter thanks to Samsung Electronics' Galaxy Note20 series, a major client. Currently, the securities firms' aggregated forecast for Samsung Electro-Mechanics' third-quarter performance estimates sales at 2.1947 trillion KRW and operating profit at 216.2 billion KRW.

In the second quarter of this year, Samsung Electro-Mechanics recorded sales and operating profit of 1.8122 trillion KRW and 96 billion KRW respectively, down 19% and 42% from the previous quarter. It is analyzed that the module division's second-quarter performance fell to 604.8 billion KRW, below the usual quarterly sales range of 800 to 900 billion KRW, which lowered Samsung Electro-Mechanics' overall results.

However, there is a forecast that the rear camera module installed in Samsung Electronics' Galaxy Note20 and Galaxy Note20 Ultra will lead to a recovery in Samsung Electro-Mechanics' performance. The reopening of Samsung Electronics' overseas offline stores, which were closed due to the COVID-19 pandemic from March to May this year, as well as the postponement of new product launches by Samsung Electronics' competitors such as Apple and Huawei to the fourth quarter around October, are also positive factors. An industry insider said, "Due to COVID-19, demand for smartphones from strategic clients (Samsung Electronics) decreased, causing Samsung Electro-Mechanics' second-quarter performance to be somewhat low, but with the second quarter as the bottom, the smartphone market is gradually recovering, and the component supply cycle will improve in the second half."

Samsung Electro-Mechanics' MLCC sales are also expected to benefit from the Galaxy Note20 effect. MLCCs are components that store electricity supplied from the power source and provide the necessary amount to electronic parts such as semiconductors; each smartphone is equipped with 800 to 1,200 units. The Component Solutions Division, responsible for Samsung Electro-Mechanics' MLCCs, recorded sales of 839.6 billion KRW, a usual quarterly sales level, despite regional lockdowns in the Philippines where the factory is located, thanks to increased supply of PCs, servers, and gaming consoles.

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