UPDATED. 2024-05-17 07:44 (금)
Earnings of Samsung’s smartphone parts suppliers recover in 2021
Earnings of Samsung’s smartphone parts suppliers recover in 2021
  • Gijong Lee
  • 승인 2022.03.02 17:45
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Challenge remains to reduce reliance on Korean tech giant
Image: Samsung
Image: Samsung

The earnings of parts suppliers to Samsung’s smartphone operations recovered in 2021 compared to the year prior, their earnings reports show.

The earnings of 17 major suppliers showed year-on-year increases in operating profit, including those of Partron (88%), BH (109%), Innox Advanced Materials (121%), Chemtronics (75%) and Segyung Hitech (765%).

Meanwhile, the operating profits of Namuga, Jahwa Electronics and Interflex returned to the black over the same time period.

However, their operating profit didn’t reach the levels of those in 2019, a year that their earnings were buoyed by the performance of Samsung’s mobile business.

Namuga, BH, Innox Advanced Material, Chemtronics, PI Advanced Materials, Jahwa Electronics and Interflex all recorded improved operating profits in 2021 compared to 2019 but the increase has little to do with Samsung except Namuga and Interflex.

Jahwa Electronics, for example, exited the camera module business it started to win orders from Samsung to return to profitability.

Samsung had shipped around 300 million units of smartphones in 2019 but this has dropped to mid- to late-200 million units per year since then.

The Korean tech giant is also shipping more mid-tier phones than flagship smartphones, which intensified competition among its parts suppliers to win orders for lower unit prices.

This has caused mixed earnings for camera module suppliers. While Partron and Namuga recorded growth last year, competitors Mcnex, Powerlogics and Cammsys saw their profits drop.

At the same time, rigid printed circuit board supplier Korea Circuit saw its revenue jump 15% year-on-year in 2021. 

The supply of high-density interconnector as well as chip boards that are in high demand probably is the cause of the growth.

Flexible board supplier BH also recorded over 1 trillion won in annual revenue for the first time in 2021. The company benefited from the launch of Apple’s iPhone 13 as well as the Galaxy Z Fold 3 and Galaxy Z Flip 3.

Interflex, which suppliers digitizers for the stylus on smartphones to Samsung, also returned to profitability in 2021. Samsung is offering S Pen for the Fold 3 and Galaxy S22 Ultra. The launch of more notebooks that support the stylus likely also helped the company’s earnings.

Innox Advanced Materials, which suppliers heat resistance sheets for Samsung’s foldable phones and iPhone 13 as well as encapsulant for large OLED panels to LG Display, also saw its operating income double in 2021 compared to 2020.

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