Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Electronic parts makers eye new growth drivers
LG Innotek Automotive Components Business Unit Senior Vice President Yoo Byaeng-kuk speaks during a media presentation at the company’s headquarters in Gangseo District, Seoul, Tuesday. Courtesy of LG Innotek
By Nam Hyun-woo
Korea’s leading electronic parts makers, LG Innotek and Samsung Electro-Mechanics, each suggested new growth drivers as part of efforts to diversify their portfolios beyond smartphone-related businesses.
During a presentation to reporters Tuesday, LG Innotek said it aims to post 1.5 trillion won ($1.08 billion) in sales from its vehicle connectivity parts business by 2030, by pre-occupying the digital key solution market.
“The digital key solution enables various in-vehicle features to be accessed via a smartphone,” LG Innotek Automotive Components Business Unit Senior Vice President Yoo Byaeng-kuk said.
“The current market remains at around 600 billion won, but it is expected to grow to about 3.3 trillion won by 2030. We are actively pursuing a range of initiatives to become the global No.1 in this field, not only with Korean automakers but also through active discussions on new business with European carmakers.”
LG Innotek launched its first digital key module in 2019 based on Bluetooth Low Energy (BLE) technology, and later released its digital key solution 2.0, which added ultra-wideband (UWB) technology to address the vulnerability of BLE to signal interference observed in the first generation.
The company is now developing its third-generation solution, which combines UWB and radar technologies. By applying its in-house high-precision 3D positioning algorithm, the system can detect the smartphone’s location with an accuracy up to 10 centimeters, eliminating issues like doors opening unintentionally or the digital key failing to activate due to errors.
“The 10 centimeter accuracy matters because the system needs to distinguish whether the smartphone is inside or outside the car when a user approaches. You don’t want the engine to start while the phone is still outside,” said Nam Hyoung-ki, leader of LG Innotek's Connectivity Development Department. “Apart from us, only one or two European firms can achieve this level of precision.”
LG Innotek employees demonstrate the company’s digital key solution during a presentation event at the company’s headquarters in Gangseo District, Seoul, Tuesday. Courtesy of LG Innotek
By integrating radar technology, a new feature that has become possible is Child Presence Detection. The radar detects a child’s movement or breathing inside the car and sends an alert to the driver’s smartphone.
“Last year alone, we secured orders for our digital key solutions for 14 vehicle models,” LG Innotek Connectivity Business Division Vice President Kim Hong-phill said. “We will continue expanding our order log by actively promoting the product to automakers in North America and Europe, consolidating our position as a leading company in the digital key market.”
Samsung Electro-Mechanics MLCC Development Team Vice President Lee Min-gon speaks during a seminar in Jung District, Seoul, Monday. Courtesy of Samsung Electro-Mechanics
Samsung Electro-Mechanics also held a seminar on Monday and introduced the future strategy for its multi-layer ceramic capacitor (MLCC) business.
“Due to the rising demands for artificial intelligence (AI) servers, the market for server MLCC will grow on average 6 percent annually, and the market for automobile parts MLCC will expand over 10 percent annually,” Samsung Electro-Mechanics MLCC Development Team Vice President Lee Min-gon said.
Described as “a dam for electricity,” MLCCs play a critical role in electronic circuits by storing electrical charge and releasing it when needed, thus stabilizing the flow of electricity to semiconductors.
The latest AI servers are equipped with more than 10 times the number of MLCCs compared to general-purpose servers, and the required technology is more complex, requiring an ultra-compact size, ultra-high capacity and resistance to high heat. The company currently holds around 40 percent of the global market share in this segment, staging a neck-and-neck race with Japan’s Murata Manufacturing.
A mock-up of Samsung Electro-Mechanics’ multi-layer ceramic capacitor / Courtesy of Samsung Electro-Mechanics
Vehicle MLCCs are also expected to see strong growth. Since vehicle MLCCs must operate stably for long periods in extreme environments, including high or low temperatures and high humidity, the components take about three times longer to develop and are more than three times more expensive compared to those used in IT devices.
Approximately 20,000 to 30,000 MLCCs are used for one electric vehicle (EV), which is about five times more than the 4,000 to 6,000 used in engine vehicles. As EV expansion comes with autonomous driving, demand for high-performance MLCCs continues to grow, especially for advanced driver assistance systems that require sophisticated electronic control.
“Currently, we are investing more than 70 percent of our human and other development resources in those two segments,” Lee said.