LG Innotek: Apple orders surge in Q4 thanks to iPhone 14 series

LG Innotek said that Apple’s iPhone orders are expected to reach a record high in the fourth quarter of 2022, and there will be a surge in order inflows. Analysts pointed out that optical solutions will benefit from the surge in iPhone 14 orders in 4Q22 (30~40% increase in a single quarter), as Pro/Max share is expected to reach a record in 4Q22 85% (65% in 21Q4).

LG Innotek supplies parts for the Pro series, the flagship of the iPhone 14 series, which is expected to account for 58% of the first iPhone shipments (up 15% year-on-year). Analysts believe that the reasons for the increase in the share of high-end models include:

  • The lack of global competitors for the iPhone in 2022-2023
  • iPhone sales remained strong despite the global recession and inflationary pressures

LG Innotek 2H22 forecast: OP is 1 trillion won (up 25% year-on-year):

  • The share of Pro Series bound orders is growing
  • The upgrade of camera pixels drives the growth of ASP
  • A new front camera is adopted

LG Innotek estimates 2H22 Optical Solutions revenue (80% of revenue for iPhones) at KRW 8.6 trillion (+46% HoH, +12% YoY), or 59% of the segment's full-year revenue, with 3Q22 OP of 4,185 100 million won (+45% qq, +25% YoY), and 4Q22 OP was 540.3 billion won (+29% qq, +26% YoY).

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