Samsung Electro-Mechanics and LG Innotek Expand into Automotive Electronics Market

Samsung Electro-Mechanics and LG Innotek are shifting away from their smartphone and IT-centric business models and expanding into the automotive electronics (automotive electronics components) market to secure future growth engines. Both companies are focusing on gaining a competitive edge in the rapidly growing automotive electronics market with distinct strategies.

According to market research firm Grand View Research on the 13th, the global automotive electronics market is projected to grow from approximately $262.6 billion in 2023 to $468 billion by 2030, with an annual growth rate of 8.6%.

Samsung Electro-Mechanics Expands into Automotive Electronics with MLCC and Camera Modules

Samsung Electro-Mechanics is expanding its core products, multilayer ceramic capacitors (MLCC) and camera modules, into the automotive electronics market. In particular, electric vehicles and those equipped with advanced driver-assistance systems (ADAS) use up to 10 times more MLCCs than regular vehicles, and the cost per unit is 2-3 times higher than for IT applications, making it a highly profitable segment.

Currently, Samsung Electro-Mechanics holds a 13% share of the global automotive MLCC market, ranking third. The company is targeting $2 billion in automotive component sales this year.

Recently, Samsung Electro-Mechanics began supplying automotive MLCCs to BYD, China’s largest electric vehicle manufacturer. Additionally, the company developed ultra-small, high-voltage MLCCs for use in LiDAR systems for autonomous vehicles and received the AEC-Q200 certification, a standard for automotive electronic component reliability.

Samsung Electro-Mechanics is also making significant progress in transitioning its camera modules for automotive use. Last year, the company developed an all-season "weatherproof" camera module featuring water-repellent coating and lens heating technology. The modules are expected to be supplied to automakers, including Hyundai and Kia, by the end of the year.

LG Innotek Focuses on Vehicle Sensing Solutions as Future Growth Engine, Expands into Advanced Modules

In contrast, LG Innotek is positioning vehicle sensing solutions as its future growth engine, focusing on the development of integrated products such as LiDAR, automotive cameras, communication and lighting modules. Notably, the company plans to begin mass production of vehicle application processor (AP) modules in the second half of this year.

The AP module is a core device that acts as the "brain" of various electronic systems inside vehicles. Despite its compact size of just 6.5 cm, it is a high-performance product containing more than 400 components.

LG Innotek is also strengthening its patent competitiveness. Over the past five years, the company has filed more than 3,500 patents related to automotive electronics, with automotive electronics accounting for 40% of its total patents. Additionally, it holds eight international standard patents in the electric vehicle communication controller (EVCC) field.

However, LG Innotek’s revenue share from automotive components is still relatively small. Last year, the automotive business generated KRW 1.94 trillion in sales, accounting for 9.2% of the total revenue, and in the first quarter of this year, sales decreased by 5% year-on-year to KRW 467.5 billion due to the slowdown in electric vehicle demand.

Nevertheless, the company continues to show gradual growth, particularly in high-value products such as communications and lighting, and its order backlog has increased by 27% year-on-year to KRW 13.6 trillion, indicating ample growth potential. LG Innotek aims to achieve KRW 5 trillion in automotive sales and over KRW 2 trillion in sensing solutions by 2029.

Industry experts analyze that while Samsung Electro-Mechanics has focused on securing immediate profitability, LG Innotek is prioritizing future growth. One industry insider explained, "Samsung Electro-Mechanics is expanding its existing strengths in MLCCs and camera modules into the automotive sector, generating stable revenue, while LG Innotek is investing in future technologies like sensing and integrated modules, focusing on securing long-term competitiveness."

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