LG Innotek Reports Q3 Operating Profit of 89.4 Billion KRW... Solid Performance in Substrate Materials and Automotive Components

Sales of 2.2298 Trillion KRW, Down 8.8% YoY
LED Business Terminated... "Improving Business Portfolio"

Chul-dong Jeong, President and CEO of LG Innotek

[Asia Economy Reporter Dongwoo Lee] LG Innotek announced on the 28th that it recorded sales of 2.2298 trillion KRW and an operating profit of 89.4 billion KRW in the third quarter of this year. Compared to the same period last year, sales decreased by 8.8% and operating profit by 52.1%. However, compared to the previous quarter, sales increased by 44.8% and operating profit by 108.2%.

LG Innotek stated, "Due to the continued COVID-19 pandemic, market uncertainty and changes in the business environment were significant," adding, "Telecommunication semiconductors, mobile substrates, and automotive components with differentiated technology and quality competitiveness showed steady growth, resulting in stable performance."

By division, the Optical Solutions business increased by 57% compared to the previous quarter. Sales amounted to 1.4584 trillion KRW, down 13% compared to the same period last year. This temporary sales decline was due to changes in customer new model volumes. However, with the start of mass production of new LG Electronics models and an increased proportion of high value-added products such as triple and high-resolution camera modules and 3D sensing modules, the results were better than expected.

The Substrate Materials business recorded sales of 319.2 billion KRW, up 8% from the previous quarter and 4% from the same period last year. Growth continued due to expanded sales of 5G telecommunication semiconductor substrates and 2Metal chip-on-film for high-resolution displays.

The Automotive Components business posted sales of 328.2 billion KRW, up 41% from the previous quarter and 12% from the same period last year. Despite the global automotive market downturn caused by the spread of COVID-19, demand for automotive components increased due to new product launches by major customers. In particular, steady growth in sales was driven by advanced driver assistance system (ADAS) cameras, DC-DC converters, and vehicle power modules.

On the same day, LG Innotek also announced that it will terminate its LED business. Accordingly, the company will produce LED products only until December this year. However, the automotive lighting module business will continue.

The LED business, centered on lighting products, has faced intensified price competition due to Chinese companies entering the market, leading to a sharp decline in profitability. Additionally, the expansion of OLED TVs has significantly reduced demand for LED backlight units for LCD TVs.

Instead of continuing the LED business, LG Innotek plans to focus on high value-added products such as automotive lighting modules. The company also intends to actively improve overall profitability by restructuring loss-making businesses.

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