LG Innotec to Promote Material and Element As Its Next-Generation Driving Forces

LG Innotec is going to promote material and element businesses as next-generation driving forces and has set a goal of making $166 million (200 billion KRW) in sales for only material and element businesses in 3 years. 

LG Innotec made an announcement on the 19th that it is entering metal power inductor and 2-metal chip-on-film businesses. It is planning to invest $58 million (70 billion KRW) and set up mass-production system. It is also thinking about buying other businesses for early commercialization. It is predicting that it will start to make sales by end of this year and has set a goal of making $166 million in yearly sales within 3 years. 

Metal power inductor is an element that is installed in inner circuits of Smartphones, displays, automobiles and others and optimizes flow of current. It decreases chances of malfunctions that might occur due to overcurrent and others and helps digital devices to work safely. About 10 to 20 power inductors are installed in Smartphones and its application is also being expanded towards automobiles.
2-metal chip-on-film is a component that connects display panels that are installed in Smartphones, TVs and others to driver ICs and main circuit boards. Because it can be folded or rolled into a ball, it can diversify designs of Smartphones or Smart Watches that have curved flexible displays.
A reason why LG Innotec is choosing these two as its next-generation driving forces is because material and element are high-added value businesses.
Material and element global markets are led by Japanese businesses such as Murata, TDK and others and record 10 to 20% operating profit ratio.
Although it takes about 10 years just to prepare for business and R&D, LG Innotec is hoping that it can reduce those years with its current businesses and synergy. 

LG Innotec believes that it is possible to commercialize metal power inductor and 2-metal chip-on-film in advance because metal power inductor’s production process is similar to that of printed circuit board’s production process that is currently under operation and LG Innotec already has tape substrate, HDI board, semiconductor board technologies that are bases for 2-metal chip-on-film.
LG Innotec is planning to actively promote material and element businesses as its 2nd new business after electronic equipment components for vehicles. Industries are watching LG Innotec with keen interest because LG Innotec is able to secure a growing business in the future following its major businesses such as camera modules and others and vehicle components if its new businesses are stabilized early. 

LG Innotec had made more than $1.66 billion (2 trillion KRW) in sales by 3rd quarter of 2015 in just camera modules. Although it is worried about Smartphone markets being stagnant, it had prepared electronic equipment components for vehicles in advance and already released 20 types of motors, sensors and others. It had made $389 million (470 billion KRW) in 2015’s 3rd quarter’s sales in vehicle components. Industries are interested whether or not material and element businesses can support medium and long-term growth. 

“Material and element businesses are areas that we definitely need to have major competitive edges in order to continuously grow our business in the future.” said President Park Jong-seok of LG Innotec. “We are going to introduce differentiate products that have customers’ values as main priority and firmly solidify our bases for global competitions in medium and long-term.”
Staff Reporter Yun, Kunil | [email protected] (specializes in electronics and parts)