Smartphone parts suppliers to Samsung Electronics Co. are running their plants at full capacity as the South Korean tech giant’s latest foldable phones gain popularity even before they hit the market.
Sekyung Hi-Tech Inc. said its factory in Vietnam is running at full capacity.
The company began mass producing optical film for foldable smartphones at the end of June, and its plant utilization rate rose to 90% in July.
Ultra-thin tempered glass (UTG) made of a foldable glass material is used in making foldable phone displays, and Sekyung Hi-Tech is the only company in Korea to mass produce UTG protective optical film.
Fine Technics Co., a manufacturer of metal plates for built-in hinges that help foldable phones fold and unfold smoothly, said its plant in Vietnam is operating at full capacity.
Samsung's Galaxy Studio The situation is similar for KH Vatec Co., which makes exterior hinges. IBK Securities expects KH Vatec’s first-half shipments of 2 million hinges to more than quadruple in the third quarter of this year.
The three Kosdaq-listed smartphone parts makers have worked for Samsung since it unveiled the world’s first foldable phone in 2019.
RECORD-HIGH PRE-ORDERS FOR NEW GALAXY FOLDABLES
On Tuesday, Samsung said pre-orders for its two latest foldable smartphones – the Galaxy Z Fold4 and the Galaxy Z Flip4 – in the week of Aug. 16-22 reached a record 970,000 units. By comparison, its predecessors Fold3 and Flip3 took pre-orders for 920,000 units over one week.
During this year’s Galaxy Unpacked event, Samsung unveiled its fourth-generation foldable phones – new additions to its high-end line of Galaxy Z Fold and Z Flip phones, as well as three new smartwatches and a pair of new wireless earbuds.
Foldables will account for more than half of Samsung’s global smartphone shipments by 2025, he said.
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Samsung, the world’s largest smartphone maker by volume, hopes its foldable phones will rival Apple’s high-end line of iPhones.
According to industry tracker Counterpoint Research, global smartphone shipments will grow to 16 million units this year, up 78% from 9 million in 2021.
Analysts expect Korean smartphone parts makers to post robust sales and profits this year, boosted by the growing appeal of the Galaxy Z series of foldable phones.
The market consensus for KH Vatec’s 2022 sales and operating profit is 440.8 billion won ($330 million) and 40.8 billion won, respectively, up 30% and 51% from the previous year.
Samsung's new foldable smartphones, the Galaxy Z Fold4 (left) and the Galaxy Flip4 Shinhan Investment Corp. forecasts Fine Technics’ sales and operating profit will rise 56% and 80% year-on-year, respectively, to 675.8 billion won and 64.6 billion won.
Sekyung Hi-Tech’s sales are forecast to rise 7.2% on year to 287.5 billion won while its operating profit is expected to increase 29% to 22.5 billion won, according to NH Investment & Securities.
Shares of Sekyung Hi-Tech were up 3.3% at 19,000 won in early Friday trading, outperforming the broader Kospi index’s 0.6% gain. Fine Technics' shares rose 2.5% to 10,050 won while KH Vatec advanced 1.3% to 19,500 won.
Write to Byung-Keun Kim at Bk11@hankyung.com In-Soo Nam edited this article.
