LG Innotek's third-quarter revenue set a record at 6.37 trillion won as operating profit fell 53.4%, with the company citing currency timing, The Korea Herald reported Tuesday.
Operating profit was 94.8 billion won ($71.5 million), below the 197.3 billion won forecast compiled by FnGuide. Revenue was 18.6% higher than a year earlier, while the operating margin narrowed to 1.5% from 3.8%, according to the newspaper.
LG Innotek linked the margin squeeze to currency movements between purchasing materials and selling products. It said materials were bought when the dollar was stronger, while sales were booked after the won strengthened, making material costs higher relative to revenue, The Korea Herald reported.
Optical solutions generated 5.40 trillion won, up 20.6% from a year earlier, and accounted for nearly 85% of company revenue. The division is led by smartphone camera modules. Higher smartphone production by customers and increased automotive camera shipments to a North American customer supported its sales, the newspaper reported.
Package solutions generated 481.8 billion won, up 10.1%, and contributed 7.6% of total sales. Demand for higher-value substrates and more shipments of flip-chip ball grid array (FC-BGA) substrates for PC processors contributed to the increase, according to The Korea Herald.
The company plans to expand its substrate offerings for AI accelerators and servers through 2028. It is also evaluating factory capacity growth and further investment in South Korea and overseas, the newspaper reported.
LG Innotek's cost plan for camera production includes AI-supported automation, making key components in-house and using a wider range of production locations. The Korea Herald said longer-term growth in semiconductor-substrate earnings will be critical to reducing LG Innotek’s reliance on smartphone cameras. The figures leave camera products as the dominant sales source, while the company develops its smaller substrate business.
