Growing Foldable Smartphone Market Draws Attention to Hinge and UTG Component Suppliers

Hyundai Motor Securities Report
2022 Shipment Forecast of 13 Million Units
Focus on Hinge and UTG Industries Among Parts Suppliers

[Asia Economy Reporter Minji Lee] Positive opinions have emerged regarding the parts industry related to foldable smartphones. Foldable smartphones are considered a next-generation smartphone form factor with high growth potential, and Samsung Electronics, which has a large supply share among domestic parts companies, is leading this market.

According to Hyundai Motor Securities on the 12th, the foldable smartphone market is expected to grow from around 700,000 units in 2019 to approximately 13 million units shipped in 2022. Samsung Electronics' Galaxy Fold series is expanding shipments by replacing the Note series, and assuming Apple's market entry in 2022, foldable smartphone shipments are expected to increase to a maximum of around 26 million units.

Park Chan-ho, a researcher at Hyundai Motor Securities, said, "Supply models are important for companies related to foldable smartphones," adding, "Samsung Electronics is leading the foldable smartphone market and is the only company recording significant shipment volumes, so attention should be paid to companies supplying parts for the Galaxy Fold series."

Currently, most parts suppliers for foldable smartphones operate under exclusive supply systems. Since shipment volumes are not large and the market is just beginning to blossom, completeness is important to secure market dominance, so most suppliers appear to maintain exclusive positions. Researcher Park Chan-ho explained, "Parts suppliers will see stock price momentum highlighted with the start of new product supply in the second half of the year," and "smartphone shipments are expected to increase to around 10 million units in 2021."

The ultra-thin tempered glass (UTG) industry, expected to see rapid adoption as the cover window for foldable displays, and the hinge industry, which enables foldable smartphones to fold, are expected to grow alongside the foldable smartphone market.

Among parts suppliers providing hinges for foldable smartphones, KH Vatec is judged to have high growth potential. KH Vatec exclusively supplies external hinges to major clients and has secured numerous references by supplying hinges even before foldable smartphones. Researcher Park Chan-ho forecasted, "The case business of the company, which resumed supply this year, is expected to benefit from the blossoming 5G market, similar to the foldable smartphone market," and added, "The stock trends of Finetechnics, UTI, and Camtronics are also expected to be positive."