Diversifying Battlefield Sales... Compensating for Smartphone Slump
Car Camera Module Market Expected to Reach 11 Trillion Won in 5 Years
[Asia Economy Reporter Han Yeju] As the autonomous vehicle market rapidly grows, the domestic parts industry is turning its attention to automotive camera modules. With the growth in information and communication technology (IT) sectors such as smartphones stagnating, companies appear to be competing to secure orders for automotive camera modules to diversify their sales.
According to industry sources on the 12th, Samsung Electro-Mechanics and LG Innotek are known to supply large-scale camera modules to Tesla, the world's number one electric vehicle manufacturer.
LG Innotek is reportedly pursuing a supply contract worth around 1 trillion KRW for automotive camera modules with Tesla. LG Innotek has previously supplied automotive camera modules and Wi-Fi modules to Tesla. Tesla officially registered LG Innotek as a parts supplier last year. If the supply contract is finalized this time, LG Innotek’s camera modules are expected to be delivered to Tesla’s factory in Austin, Texas, USA.
Samsung Electro-Mechanics is also said to have been selected as the final supplier in Tesla’s electric truck camera module bid held at the end of the first quarter. The supply amount is in the trillions of KRW, marking the largest single order scale for camera modules ever. The final destinations are Tesla factories in Shanghai and Berlin. Samsung Electro-Mechanics had previously supplied vehicle camera modules only to some customers like Renault, but after successfully securing an order worth 490 billion KRW for Tesla’s electric trucks last year, it has officially entered the market.
Tesla is a major player in the automotive camera module market. It is attempting to implement full self-driving (FSD) functionality using only its camera-centric 'Tesla Vision' system without employing LiDAR. Tesla’s existing market share (by sales) is known to be around 60% for LG Innotek and about 30% for Samsung Electro-Mechanics.
As the smartphone market, their mainstay sector, has entered a stagnation phase, Samsung Electro-Mechanics and LG Innotek are rapidly shifting their focus to the automotive market.
According to market research firm Counterpoint Research, global smartphone shipments this year are expected to decline by 35 million units from the previous year to 1.357 billion units. In contrast, the automotive market is forecasted to see simultaneous increases in demand and prices over the next few years. While level 2 autonomous vehicles require about 7 to 8 cameras, level 3 autonomous vehicles typically need 12 or more cameras. Prices are also about 4 to 5 times higher than smartphone cameras, which cost around 8 to 10 USD per unit. This allows companies to achieve both sales diversification and product mix improvement simultaneously.
Unlike China, which assembles and sells individual modules, Samsung Electro-Mechanics and LG Innotek possess all ultra-precision hardware technologies from lens design and molding to autofocus and optical image stabilization. This is why there are expectations that domestic companies will continue to perform well in the automotive camera module market.
An industry insider said, "Due to the nature of automotive parts that prioritize safety, automotive camera modules must have much higher durability and quality compared to smartphone modules," adding, "The entry barrier is high, so performance is expected mainly from companies that have already established references."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
