Jahwa Electronics will ends its smartphone camera module operation after only a year due to low profitability, people familiar with the matter told TheElec Monday.
Those in the business will be shifted to other operations within the first half of the year, they said.
The company started the operation in the second half of 2019. Jahwa posted 197.2 billion won in sales during that period. Between 20% to 30% came from camera modules, but profitability was low, they added.
By comparison, Cammsys, the fourth largest camera module vendor to Samsung in terms of revenue, posted sales of 330.8 billion won on the second half of 2019.
The local camera module market has expanded thanks to Samsung’s adoption for multi-cameras on its smartphones, but unit prices has fallen also, another person said.
The South Korean tech giant was also using more original design manufacturers (ODM) from China, which uses their own camera module supply lines.
Samsung’s lackluster sales of its smartphone this year is also pressuring the company. Jahwa’s sales for the first half of 2020 is expected to worst than the second half of last year.
Though second quarter earnings are yet to be announced, the component maker posted 63.9 billion won in revenue and 12.3 billion won in operating loss in the first quarter. Sales dropped 31.1% from a year ago. It is unlikely that it will fair any better in the subsequent quarter.
It is an additional 10 billion won in loss from a year prior __ likely caused by equipment cost.
Auto-focus, OIS and vibration motors is accounting for over 85% of Jahwa’s sales. The company just started its positive temperature coefficient heater business for electric vehicles, which accounts for little in sales.
The component maker has posted two straight years of loss as of 2019.
Meanwhile, compatriot Bangjoo also ended its smartphone camera operations last year. The company supplied modules and lens fastener for OIS to Samsung previously. It posted 15.4 billion won operating profits and 254.8 billion in sales for the year 2018, backed by the supply line.
But it filed rehabilitation plans to a local court due to financial difficulties.