Most of South Korea’s smartphone camera lens module manufacturers are depending heavily on Japan for key materials and components such as resin and spacers, according to industry sources on July 21.
There also aren’t Korean alternatives, meaning smartphone makers will be in big trouble should Tokyo decide to widen the scope of its latest export ban. Earlier this month, the Japanese government said it will restrict the export of key tech materials to South Korea.
“Locally produced resins can be used for low-definition cameras, but not for high-definition cameras like those fitted into the Galaxy A series and the Galaxy S series, which all use Japanese resins,” said an industry watcher on July 21.
The resin is provided by a handful of Japanese companies including Mitsui Chemicals. In Korea, there are some makers such as Sekonix, Digital Optic, Haseung Optics and Diostech. Meanwhile, spacers are provided almost 100% by Japan’s Kimoto.
"The resin market may appear insignificant, but the conglomerates should have been more prepared to diversify the source,” said another market watcher.
However, another industry source said that since most of the lens manufacturing facilities are located in Vietnam and not South Korea, the country won’t be too hard hit. But the situation may be reversed if Tokyo decides to apply the ‘end user’ rule, as it has on the key materials for semiconductors and displays.
Another material that could face a shortage is VCM, which is a key part for AF and OIS actuator supplied mostly by Japan’s Alps and Mitsumi.
Image sensors are also largely supplied by Japanese manufacturers, but they can be easily replaced by Korean counterparts, meaning Tokyo is less likely to ban them.
Among the market heavyweights, Samsung Electro-mechanics buys image sensors from Sony and Samsung Electrics. LG Innotek gets them from Sony and Infineon. “Samsung Electro-mechanics and LG Innotek can both easily switch to Samsung Electronics for image sensors,” said another market watcher.
LG Innotek may find it a bit more difficult to cope since Sony is a bigger partner.
"Hopefully, there won’t be too much of an issue since many of these camera modules are supplied to Apple, and Washington won’t allow the trade war between Seoul and Tokyo to affect Apple,” he added.
Samsung Electronics is currently running a contingency plan in the face of the trade war with Japan. The tech giant recently sent letters out to suppliers asking them to stock up on at least 90 days’ worth of materials, at its own expense.
The Elec is South Korea’s No.1 tech news platform.