LG Innotek's third-quarter revenue tops 6 trillion won for first time; operating profit falls as exchange rate declines

[Financial News] LG Innotek posted its highest-ever third-quarter revenue this year, topping 6 trillion won. The increase came as supplies of camera modules rose with the start of mass production for customers' new models, while demand for high-value-added semiconductor substrates also grew.
LG Innotek said on the 27th that it posted consolidated revenue of 6.3671 trillion won and operating profit of 94.8 billion won in the third quarter of this year. Revenue rose 18.6% from the same period last year, surpassing 6 trillion won for the first time on a third-quarter basis. Operating profit, however, fell 53.4% year over year amid a decline in the won-dollar exchange rate.
The Optical Solutions business led revenue growth. Revenue at the Optical Solutions business division, whose main products include camera modules, rose 20.6% year over year to 5.4041 trillion won. As mass production of customers' new models ramped up, increased supplies of high-value-added camera modules for mobile devices contributed to strong results. Revenue also increased as supplies of automotive cameras to North American customers grew.
The Package Solutions business also continued to post revenue growth, driven by rising demand for high-value-added semiconductor substrates. The Package Solutions business division generated revenue of 481.8 billion won in the third quarter, up 10.1% from the same period last year. The semiconductor supercycle drove results, with robust demand for semiconductor substrates such as radio-frequency system-in-package (RF-SiP) and Flip Chip-Chip Scale Package (FC-CSP). Revenue from Flip Chip Ball Grid Array (FC-BGA) products also increased, led by products for PC CPUs.
The Mobility Solutions business posted revenue of 481.1 billion won, up 6.8% from the same period last year. Revenue increased for key products such as automotive communication modules and lighting, while new businesses including automotive application processor (AP) modules and digital keys also contributed to growth.
Revenue increased across all business divisions, but operating profit declined year over year due to the fall in the won-dollar exchange rate. An LG Innotek representative explained, "Operating profit fell year over year because the won-dollar exchange rate plunged between the time raw materials were purchased and the time products were mass-produced and shipped."
LG Innotek plans to improve profitability by restructuring its business portfolio around high-profit, high-value-added products and strengthening the competitiveness of its core businesses. It is also pursuing business expansion in physical AI fields such as autonomous driving and robotics.
In its Package Solutions business, LG Innotek is pursuing production-facility expansions and considering additional investments at home and abroad to meet demand for high-value-added semiconductor substrates such as FC-BGA. Having begun mass production of FC-BGA products for PC CPUs, the company plans to enter the market for high-layer-count, large-area products for AI accelerators and servers in stages by 2028. FC-CSP will expand its applications from mobile APs to memory.
The Optical Solutions business plans to automate and make its processes more intelligent through artificial intelligence transformation (AX), while improving cost competitiveness by bringing key components in-house and establishing a dual-site global production footprint. The Mobility Solutions business plans to strengthen the competitiveness of high-value-added products such as automotive communications and lighting, while focusing on improving the efficiency of global production operations and expanding new businesses such as automotive AP modules and digital keys.

[email protected] Park Ji-yeon Reporter