LG Innotek said on Oct. 27 it posted third-quarter revenue of 6.37 trillion won and operating profit of 94.85 billion won. Revenue rose 18.6 percent from a year earlier, but operating profit fell 53.4 percent. The operating margin stayed at 1.5 percent.

The drop was sharper from the previous quarter. Operating profit fell 61.4 percent in a single quarter from 245.7 billion won in the second quarter. Net profit for the quarter also fell 25.8 percent from a year earlier to 95.2 billion won.

The company attributed the deterioration in profitability to the exchange rate. A company official said operating profit fell from a year earlier due to a sharp drop in the won-dollar exchange rate between the timing of raw material purchases and the timing of mass production shipments of products.

Quarterly profit fell, but the year-to-date trend remains smooth. Cumulative revenue for January to September rose 22.0 percent from a year earlier to 17.43 trillion won. Cumulative operating profit increased 86.9 percent to 635.92 billion won.

Revenue topped 6 trillion won for the first time for a third quarter. Revenue rose from a year earlier across all business segments. A company official explained that supply of mobile camera modules increased as mass production began for new models for customers, and that demand steadily rose for high value-added semiconductor substrates including RF-SiP (Radio Frequency-System in Package), FC-CSP (Flip Chip-Chip Scale Package) and FC-BGA (Flip Chip-Ball Grid Array), contributing to revenue growth.

Most of the revenue came from the optical solutions business. Revenue in the segment rose 20.6 percent to 5.4 trillion won. As mass production of new customer models gathered pace, supply of high value-added camera modules for mobile devices increased, and volumes of automotive cameras supplied to North American customers also rose.

Revenue from the package solutions business rose 10.1 percent to 481.8 billion won. Demand continued for RF-SiP and FC-CSP, while FC-BGA expanded supply of PC CPU products for global customers.

Revenue from the mobility solutions business rose 6.8 percent to 481.1 billion won. Main products such as in-vehicle communication modules and lighting grew. New businesses such as in-vehicle AP modules and digital keys also supported revenue growth.

LG Innotek is reshaping its business portfolio around high-profit, high value-added products. It is also fostering physical AI businesses such as autonomous driving and robots. For now, it plans to focus all efforts on boosting profitability by strengthening competitiveness in its core businesses.

The package solutions business is pushing to expand production plants to meet rapidly rising demand and is reviewing additional investment at home and abroad. For FC-BGA, it plans to enter step by step by 2028 the high-end market for high-layer-count and large-area products for AI accelerators and servers, following mass production for PC CPUs. For RF-SiP, it aims to solidify its No. 1 global position by highlighting differentiated technologies such as Cu-Post. FC-CSP is expanding its applications from mobile APs to memory.

The optical solutions business plans to raise productivity through AX-based process automation and secure cost competitiveness through internalising key components and diversifying production sites. The mobility solutions business plans to focus on strengthening competitiveness in high value-added products and expanding new businesses.