[Click eStock] Apple Takes Flight... Begins Selecting Component Suppliers "Expecting Benefits"

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] Investment opinions have emerged expecting benefits as LG Electronics, LG Display, and LG Innotek are likely to be selected as suppliers for Apple.

According to KB Securities on the 13th, it is estimated that Apple has recently begun selecting suppliers for its new business, the Metaverse XR headset, and key components for the Apple Car. Going forward, when selecting suppliers for new business components, Apple is expected to prioritize the geopolitical risks of the prolonged US-China conflict and actively utilize the existing iPhone supply chain, which has been verified in the market. Therefore, it seems highly likely that Apple will prefer Korean companies over Chinese ones. LG Display and LG Innotek are expected to supply OLED and 3D sensing modules to realize 3D stereoscopic images and enhance immersion for the Metaverse XR headset to be released in the second half of 2022.

In particular, LG Display and LG Innotek are presumed to be part of the Apple Car task force (TF), preparing to supply parts for the Apple Car, and LG Electronics is expected to seek business entry through a joint venture (JV: LG Magna Powertrain) with its automotive partner Magna.

Kim Dong-won, a researcher at KB Securities, stated, "LG Electronics, LG Display, and LG Innotek, which are focusing on intensive investment in the automotive sector, are judged to have already secured the core parts supply chain necessary for Apple Car production, and are expected to become strong Apple Car partners in the future."

Meanwhile, as of December 10 local US time, Apple's stock price rose 2.8% from the previous day to a record high of $179.45, and its market capitalization reached $2.94 trillion (3,479.9 trillion KRW), approaching $3 trillion. Apple's market capitalization exceeded $1 trillion in 2018, surpassed $2 trillion in August 2020 after two years, and is now looking at $3 trillion again within a year as of December 2021. Therefore, if the current stock price rises by about 2%, Apple's market capitalization will exceed $3 trillion for the first time in three years since 2018. The strong performance of Apple's stock price is due to investors perceiving Apple as a safe investment amid concerns over global economic slowdown caused by entering a period of interest rate hikes next year and the resurgence of COVID-19, ① along with abundant cash holdings and continued strong performance of current businesses (iPhone 13 sales exceeding expectations), and ② the concretization of future new businesses (release of the Metaverse XR headset in 2022, unveiling of the Apple Car in 2025).

Global investors recognize Apple as a safe investment destination.

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