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[Alpha Biz=(Chicago) Reporter Paul Lee] LG Innotek has set up a two-track strategy to strengthen its capacity to produce entry-level products at its forward base in Vietnam and focus on high value-added premium products in Korea. To realize this, it announced on the 26th that it will invest 1.3 trillion won (about 1 billion dollars) in the Haiphong production corporation in Vietnam.
LG Innotek previously established Haiphong Corporation in September 2016. Haiphong Corporation began producing camera modules in September 2017 and exceeded 1 trillion won in sales the following year. As demand for camera modules from customers such as Apple exploded, it invested an additional $ 140 million (about KRW 149.6 billion) in 2018 by expanding it within four months of operation.
Since then, Haiphong Line has grown steadily, recording sales of 4.3479 trillion won and net profit of 145.9 billion won last year. It is the largest overseas subsidiary of LG Innotek. Currently, about 3,500 employees are working locally.
LG Innotek aims to further strengthen its camera production capacity for smartphones through this additional investment. The expansion investment will more than double the camera module production capacity (CAPA) of the Vietnamese plant. The new plant is scheduled to be completed in the second half of 2024 with the aim of mass production in 2025. Haiphong City also welcomed this and decided to support the installation of additional substations and tax benefits to expand power.
LG Innotek has strengthened its investment in camera modules in Vietnam because it believes that the smartphone market will continue to grow again. According to Trendforce, a Taiwanese market research company, smartphone camera module production is expected to reach 4.62 billion units this year. It increased 3.6% compared to last year's output of 4.46 billion units.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
