LG Innotek, a division of the South Korean giant tasked with making camera modules for the iPhone, is working hard to reduce its reliance on Apple.
The LG unit earned over A$12.1 billion last year from supplying the modules to Apple, which amounted to around 75 per cent of LG Innotek’s total sales.
In July, the division doubled down, spending A$1.5 billion to expand production of the modules, which are composed of a lens, an image sensor and a digital signal processing unit.
LG Innotek’s flagship plan in Gumi, South Korea is currently running at full capacity to turn out the iPhone 14 camera modules.
Orders for the iPhone 14 are larger than for the 13, which in itself marked a 50 per cent increase from Apple’s orders for iPhone 12, according to a supplier who spoke to Nikkei Asia.
Such heavy reliance makes the unit vulnerable to increased competition to the iPhone and at the mercy of its relations with Apple.
LG Innotek’s reliance on Apple comes after fellow module supplier Ofilm Group was blacklisted last year by the U.S. Department of Commerce.
Sharp, another supplier of these modules, saw its Vietnamese factories hampered by COVID-19 restrictions, leaving the door open for LG Innotek to supply extra modules.
LG Innotek’s fortunes have also increased along with the iPhones camera count: in 2016, Apple accounted for just 37 per cent of Innotek’s business; as they added dual and triple camera system, this rose gradually, to now make up 75 per cent of all sales.
