OFilm Group has been included in the list of Chinese companies the US is sanctioning over Uighur human rights violations.
The Apple camera supplier was among the 11 companies announced by the US Department of Commerce to have allegedly been involved in repressing Uyghur Muslims and other Muslim ethnic minorities within China.
The companies will need to get a license to purchase US technology.
OFilm Group is expected to have supplied over 10% of camera modules used in the upcoming iPhone 12 series. South Korea’s LG InnoTek is expected to have supplied mid-40% of the total camera modules and Sharp, which was acquired by Taiwan’s Foxconn, to have provided mid-30%.
If the Chinese company is excluded from Apple’s suppliers list this will likely benefit South Korean camera module makers. Cupertino is also attempting lessen its reliance of Chinese supply chain.
Apple was already in talks with a South Korean camera module maker besides LG InnoTek, people with direct knowledge of the matter said, though it will take a while before any supply deal is made.
The iPhone maker will likely that expand its supply from LG InnoTek to diversify its supply line while Sharp’s technology is not what it was once. LG was effectively the sole supplier of camera modules for the triple camera on the high-end iPhone 12 models as well as the 3D ToF modules.
Apple is also looking to strengthen the capabilities of the telephoto camera. The company and LG InnoTek’s patent dispute with Israel-based CorePhotonics also revolves around telephoto technology. CorePhotonics, which was acquired by Samsung Electronics last year, is known to have many patents in telephoto technology such as folded zoom. OFilm Group last month said it has also developed telephoto technology but whether it can sell it has become uncertain due to the recent US sanctions.
There are many potential candidates in South Korea: Samsung Electro-Mechanics, MCNEX, Partron, Cammsys, PowerLogics and Namuga are some of the camera module makers here.
Samsung Electro-Mechanics is already an Apple supplier. It provides rigid flexible printed circuit boards and multi layer ceramic capacitors for the OLED displays used in iPhones.
MCNEX, Patron and Cammsys are all camera module suppliers to Samsung for the premium smartphones. These companies are also developing folded zoom technology, 180MP camera and ToF modules.
Apple has asked its suppliers, including those based in South Korea, to move 15% to 30% of their operations in China to other countries, people familiar with the matter said. But his process will likely take years. South Korean camera module makers also already have large production sites in their home country and Vietnam.
Meanwhile, the US government has announce such lists two times before. It sanctioned 28 companies in China back in October last year and 9 more last month.