[Edaily Reporter JAEMIN SONG ] LG Innotek’s revenue surpassed 6 trillion won for the first time in the third quarter of this year, but its operating profit fell by more than half compared to the same period last year. While the company continued to grow its revenue driven by the launch of new iPhone models by its major client, Apple, and increased demand for high-value-added semiconductor substrates, the sharp drop in the won-dollar exchange rate weighed on profitability. LG Innotek plans to improve profitability by expanding its high-value-added businesses, such as semiconductor package substrates.

LG Innotek announced on the 27th that its consolidated operating profit for the third quarter of this year was preliminarily estimated at 94.8 billion won, a 53.4% decrease compared to the same period last year. Revenue rose 18.6% to 6.3671 trillion won, surpassing the 6 trillion won mark for the first time in a third quarter.

The primary cause of the decline in profitability is exchange rate volatility. The cost burden increased as the won-dollar exchange rate plummeted between the time raw materials were purchased and the time products were mass-produced and shipped. In particular, LG Innotek relies heavily on Apple for a significant portion of its revenue; as of the first half of this year, Apple accounted for approximately 78% of its revenue. This makes the company’s performance highly volatile due to fluctuations in major clients’ new product sales and exchange rate changes.

A company official explained, “Operating profit decreased year-over-year due to a sharp drop in the won-dollar exchange rate between the time raw materials were purchased and the time products were mass-produced and shipped.”

By business segment, the Optical Solutions business recorded revenue of 5.4041 trillion won, a 20.6% increase year-over-year. This was driven by expanded supply of mobile camera modules following the mass production of Apple’s new iPhone 18 and increased supply of automotive cameras to North American customers. Revenue in the Package Solutions business rose 10.1% to 481.8 billion won due to increased demand for semiconductor substrates, while the Mobility Solutions business saw revenue increase by 6.8% to 481.1 billion won.

In the Package Solutions Business, demand continued for high-value-added semiconductor substrates such as Radio Frequency System-in-Package (RF-SiP) and Flip-Chip Chip-Scale Package (FC-CSP). Flip-Chip Ball Grid Array (FC-BGA) also contributed to revenue growth as the supply of products for PC central processing units (CPUs) to global customers expanded.

LG Innotek is strengthening its high-value-added semiconductor substrate business to improve profitability. While reviewing plans to expand its FC-BGA production facilities and make additional investments both domestically and internationally, the company also plans to gradually enter the high-end market for high-layer-count and large-area products used in artificial intelligence (AI) accelerators and servers by 2028. It is also accelerating efforts to foster its “Physical AI” business, which includes autonomous driving and robotics.

Moon Hyuk-soo, President of LG Innotek, said on the 13th regarding efforts to secure long-term supply agreements (LTAs) for FC-BGA with global big tech companies, “We are continuing to pursue LTAs, and things will improve starting next year.”