LG Innotek ramps up iPhone 18 Pro camera, AI substrate output

LG Innotek Co. is ramping up production of a variable-aperture camera module for Apple Inc.'s iPhone 18 Pro, the first iPhone to feature the technology, and expanding its semiconductor substrate output for AI servers. The company posted record first-half revenue above 10 trillion won ($7.1 billion), with second-quarter operating profit of 245.8 billion won, up 2,057 percent from a year earlier. LG Innotek broke ground in mid-July on a $1 billion plant in Haiphong, Vietnam, for general-purpose substrates, with mass production slated for 2028, while server-grade FC-BGA substrates are targeted for 2027 at its Gumi facility in Korea.

LG Innotek is heading into Apple's September iPhone launch off its best-ever first half, pushing on two fronts: a variable-aperture camera module now ramping up for the iPhone 18 Pro, and a longer-term expansion in the semiconductor substrates used in AI servers. The Korean parts maker is supplying the module for a variable-aperture main camera expected in the iPhone 18 Pro, the first iPhone to use it. Adjustable apertures are standard on conventional camera lenses but new to the iPhone, which has a fixed lens opening and leans on software instead. Switching to a lens that controls incoming light should mean sharper daytime shots and more natural background blur. For LG Innotek, the point is the price tag. The part is harder to assemble, which is expected to lift both the module's selling price and the company's share of main camera supply, as happened when Apple adopted a folded zoom lens on the iPhone 15 Pro Max. Output was set to begin around June or July for the launch and has been ramping up since, according to industry sources. NH Investment & Securities said the more complex module should push the model's selling price above the usual year-on-year gain, easing fears that Apple would squeeze suppliers to offset rising memory costs. LG Innotek posted record first-half revenue above 10 trillion won $7.1 billion , with second-quarter operating profit of 245.8 billion won, up 2,057 percent from a year earlier. Optical solutions, sold almost entirely to Apple, made up about 82 percent of that quarter's revenue. The other bet is substrates, the boards that link high-performance chips to circuit boards, where the prize is the high-end FC-BGA used in AI servers. LG Innotek's package-solutions unit brought in only about a tenth of 2025 revenue but close to a fifth of operating profit, a gap it expects to widen as that demand grows. LG Innotek broke ground in mid-July on a $1 billion plant in Haiphong, Vietnam, and won its investment license from the city late last month. The plant will focus on general-purpose substrates such as RF-SiP and FC-CSP, with mass production slated for 2028. The higher-value FC-BGA substrates for AI servers are anchored at LG Innotek's Gumi "mother factory" in Korea, where server-grade output is targeted for 2027. The company says it has not yet decided how much FC-BGA capacity the Vietnam site will eventually take on. CEO Moon Hyuk-soo told staff last week the record half showed LG Innotek moving "beyond our long-standing pattern of performance being concentrated in the second half of the year," crediting a higher-value product mix rather than the iPhone. mjh@heraldcorp.com