Apple’s logo. AP-Yonhap News
Expectations are growing that Samsung, LG and other major Korean companies will be the main beneficiaries of Apple’s first foldable phone, which goes on sale on the 9th. Even with the smartphone market contracting this year, Korean suppliers are leading the supply of core foldable iPhone components, from memory chips to displays, cameras and semiconductor substrates.
Samsung Display’s and LG Innotek’s (011070) smartphone component businesses are expected to grow about 10% from last year, according to industry sources on the 6th. Brokerages project Samsung Display’s revenue at 32.5 trillion won, up 8.7% from a year earlier, and revenue at LG Innotek’s optical solutions division, which makes camera modules, at 21.544 trillion won, up 17.6%.
The gains come even as research firm IDC forecasts global smartphone shipments will fall 16.7% this year from 2024. Analysts attribute the growth to supply of high-margin components for Samsung Electronics’ (005930) Galaxy Z8 series in the first half, followed by foldable iPhone parts starting in the third quarter.
“The foldable iPhone packs in the latest technology, so component prices inevitably rise to reflect development costs,” an industry official said. “For suppliers, that means high value-added business.” The foldable iPhone is expected to be priced at about $2,000 to $2,500 (about 2.7 million to 3.4 million won), with roughly 8 million units shipped this year.
Samsung Display is the exclusive supplier of panels for the 7.8-inch inner screen and the 5.5-inch outer screen. By surface area, the panels required for the foldable iPhone are equivalent to those for 24 million conventional smartphones. That is two-thirds the volume of Samsung Electronics’ flagship Galaxy S line, which ships about 35 million units a year. Because the panels must meet demanding technical requirements, including a hinge structure that minimizes the crease and ultra-thin glass, the supply price is said to be about 20% higher than for Galaxy foldable phones.
LG Innotek leads camera module supply. The foldable iPhone carries two rear cameras, a 48-megapixel wide-angle lens and an ultra-wide lens. LG Innotek has secured 55% to 60% of the camera volume needed for the new iPhone lineup including the foldable, according to Citi Research. Beyond the foldable, the iPhone 18 Pro Max adds a variable aperture that adjusts to light levels, lifting the unit price of LG Innotek’s camera modules. Displays and cameras accounted for 7% and 11% of premium phone costs, respectively, in the third quarter of this year, according to Counterpoint Research.
Korean companies also supply semiconductor substrates and multilayer ceramic capacitors. LG Innotek makes radio-frequency system-in-package units for communications chips, while Samsung Electro-Mechanics (009150) produces flip-chip ball grid array substrates for application processors as well as MLCCs, which supply and control current stably, for the foldable iPhone.
Samsung Electronics and SK hynix (000660) also play a key role in the foldable iPhone supply chain through memory chips. The two companies supply 70% of the 12-gigabyte LPDDR5 DRAM used in the device, with Samsung Electronics at 37% and SK hynix at 33%. The remainder comes from U.S.-based Micron. For NAND, the two account for 45% combined, with Samsung Electronics at 15% and SK hynix at 30%.
Samsung Electronics, which competes directly with the foldable iPhone, says the launch is “not bad” for it either. Foldable phones still make up only 2% of the overall smartphone market, and if Apple’s entry drives real growth, that could highlight the products and technology of Samsung Electronics as the market leader.