LG Innotek delivered a stellar performance in the second quarter of 2024, with revenue hitting a quarterly record and operating profit soaring by 726.2% year-on-year. Analysts credit the enduring popularity of Apple's iPhone 15 series for the company's exceptional results, defying the typical seasonal slowdown.
The South Korean tech firm reported KRW 4.55 trillion in revenue for the quarter, representing a 16.67% annual increase but a slight 1.09% sequential decline. Operating profit surged to KRW 151.7 billion, marking an annual jump of over 700% despite a 13.81% sequential dip. While these figures lag behind the first quarter's results which were bolstered by the effect of new devices, they underscore LG Innotek's ability to navigate the traditionally challenging second quarter.
As Apple's primary camera module supplier, LG Innotek's business results are closely tied to iPhone sales. The company's exclusive supply of the high-value "foldable zoom camera" for the iPhone 15 series is seen as a major contributor to its profitability. In particular, strong demand for the iPhone 15 series in China, fueled by Apple's aggressive promotions there, boosted shipments of LG Innotek's camera modules.
Beyond camera modules, the company's IC substrate business benefited from the iPhone 15's success. LG Innotek's RF-SiP substrates in the latest iPhone model directly contributed to the company's overall performance.
With KRW 328.7 billion in operating profit for the first half of 2024, LG Innotek is poised for another strong year. As the supplier of camera modules and IC substrates for the upcoming iPhone 16 series, the company's ability to maintain its growth momentum and potentially surpass KRW 1 trillion in annual operating profit is a key focus for market attention.
LG Innotek achieved operating profit exceeding KRW 1 trillion in 2021 and 2022, but the figure slipped to KRW 830.8 billion in 2023 due to economic headwinds. The anticipated launch of the iPhone 16 series in the fall, featuring Apple's new AI system, Apple Intelligence, is expected to drive renewed demand for smartphones.
While the iPhone 16 series will expand the use of foldable cameras, the potential entry of new suppliers could impact LG Innotek's camera module shipment volume.
