Chinese camera module makers O’Film Group and Sunny Optical are expected to grow significantly this year thanks to their supply deals with Apple and Huawei as they adopt more and more multi-camera set-ups for their smartphones.
Camera module suppliers to Samsung Electronics, meanwhile, are expected to face challenges throughout the year.
O’Film is expected to post operating profits of 2.4 billion yuan this year, quadruple of its operating profit in 2019. The company is a supplier of camera modules for the iPhone 12 launching later this year. Apple’s smartphones are highly profitable for their suppliers as they come in only few different models that are each mass produced.
O’Film’s net income for the first half was 500 million yen, 23 times that of its net income a year prior. The company shipped 55 million units of camera modules to non-Android phones in the first half of 2020, a rise of 30.3% from the same time period a year ago.
Sunny Optical, meanwhile, is expecting operating profits of 5.2 billion yuan this year, a rise of 13% from 2019. Sales will grow 14.6% from a year go. Its main client is Huawei, which beat Samsung for the first time in smartphone shipment in the second quarter.
LG InnoTek is also expected to grow thanks to its supply to Apple. Its optical solution business is expecting operating profits to rise 29.4% and sales 16.9% this year compared to 2019. The company is the exclusive supplier of the triple camera and 3D Time of Flight module for the iPhone 12 series. LG InnoTek’s modules accounted for near 50% of those used the new iPhone.
In contrast, camera module suppliers to Samsung Electronics is expected to post lackluster performance this year.
Samsung Electro-Mechanics’ module solution business is expecting operating profits to drop 39.4% and sales to decrease 9.3% this year from a year prior. It is the main supplier of the rear camera modules to Samsung Electronics. The South Korean smartphone maker is expected to ship over 10 million units less of flagship smartphones.
MCNEX, Partron and Power Logics are all expected see their annual operating profits for 2020 drop over 30% compared to 2019. These companies saw huge sales jump last year thanks to Samsung launching more smartphones with multi-cameras. MCNEX is expected to operating profits drop 33.6%, Partron 45.9% and Power Logics 32.7%. Partron and Power Logics will likely fail to reach annual sales of 1 trillion won.
Samsung and Huawei are expected to compete fiercely throughout the remainder of the year. Apple initially lowered its iPhone shipment estimate from the COVID-19 pandemic but recently increased it again. The performances of these three companies will determine the earnings of their camera module suppliers.