Samsung’s China shift is bleeding its Korean suppliers dry

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Last updated: September 29th, 2021 at 14:03 UTC+01:00

Samsung’s adoption of multi-camera systems for smartphones a few years ago didn’t seem to have helped local lens suppliers much. In fact, the opposite happened, and rival companies from China have been thriving on the back of Samsung’s orders for a few years. Meanwhile, lens suppliers in South Korea were all in the red last year, and Haesung Optics stopped producing lens modules altogether earlier this month.

Sekonix reportedly was the only domestic smartphone camera lens supplier that had recorded an operating profit in the first half of the year. However, most other South Korean suppliers that were hoping to grow their business after Samsung switched to multi-camera systems haven’t been as lucky, and many of them are on the verge of losing their business entirely.

Samsung’s aggressive cost-saving strategies go beyond camera lenses

Samsung, like many other smartphone makers, is looking for ways to cut production costs. And to this end, the company’s been outsourcing the production of more smartphone models to ODMs and began acquiring more parts — OLED panels and batteries — from Chinese suppliers, including TCL, BOE, and ATL.

Word is that more TCL and BOE panels will be used for future low and mid-range smartphone models, while ATL batteries will reportedly power the Galaxy S22 series. And although there were rumors of a possible collaboration with Japanese camera manufacturer Olympus for the Galaxy S22 series’ camera system, they were later denied by the company.

Getting back to South Korean lens suppliers, industry watchers are worried that companies from China who benefit from supplying modules to Samsung could end up dominating the segment, similar to how LCD manufacturers did.

An unnamed industry official cited by The Elec went as far as claiming that if the domestic lens industry doesn’t improve, “it will be a burden on Samsung Electronics.”

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BusinessGeneralPhone ChinaSamsung ElectronicsSouth Korea
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