South Korea's biggest tech suppliers are facing a profit squeeze in what should be their best quarter of the year, as a sharp appreciation of the won erases one of the key tailwinds behind their earnings — even as Apple's new foldable iPhone Duo promises a wave of component orders.
The second half of the year has traditionally served as a peak harvest season for suppliers such as Samsung Display and LG Display, fuelled by Apple's annual flagship device debuts, with component makers routinely posting their strongest earnings of the year. This time, however, analysts have slashed earnings forecasts for LG Display, LG Innotek and Samsung Electro-Mechanics, according to Korea Economic Daily's KED Global.
South Korea's largest companies are scrambling to redraw business plans after the dollar-won exchange rate fell by nearly 200 won in just over two months, raising concerns that the currency tailwind which has supported corporate earnings this year is disappearing.
Apple entered the foldable market on September 9, unveiling the iPhone Duo — its long-awaited first foldable smartphone, priced at $2,000 — at an event at the Steve Jobs Theater in Apple Park, Cupertino. The launch intensifies competition in the high-end foldable segment pioneered by market leader Samsung Electronics, and should in theory bring a bonanza of display and component orders for Apple's Korean suppliers.
Instead, the strong won is compressing margins for exporters whose revenues are largely dollar-denominated. The profit pressure extends across the supply chain: LG Display is meanwhile trying to regain its footing by concentrating on high-value, smaller OLED products while abandoning the low-margin LCD business, and Samsung Electro-Mechanics has joined global price hikes for multilayer ceramic capacitors as AI infrastructure investment worsens supply shortages.
The won's surge has upended the earnings outlook not just for suppliers but for South Korea's biggest exporters generally, turning a year that was supposed to deliver peak-season gains into a scramble for revised business plans.
Sources:
- S.Korean Apple suppliers, including Samsung, LG, face profit squeeze despite iPhone Duo debut (KED Global / Korea Economic Daily)
The second half of the year has traditionally served as a peak harvest season for suppliers such as Samsung Display and LG Display, fuelled by Apple's annual flagship device debuts, with component makers routinely posting their strongest earnings of the year. This time, however, analysts have slashed earnings forecasts for LG Display, LG Innotek and Samsung Electro-Mechanics, according to Korea Economic Daily's KED Global.
South Korea's largest companies are scrambling to redraw business plans after the dollar-won exchange rate fell by nearly 200 won in just over two months, raising concerns that the currency tailwind which has supported corporate earnings this year is disappearing.
Apple entered the foldable market on September 9, unveiling the iPhone Duo — its long-awaited first foldable smartphone, priced at $2,000 — at an event at the Steve Jobs Theater in Apple Park, Cupertino. The launch intensifies competition in the high-end foldable segment pioneered by market leader Samsung Electronics, and should in theory bring a bonanza of display and component orders for Apple's Korean suppliers.
Instead, the strong won is compressing margins for exporters whose revenues are largely dollar-denominated. The profit pressure extends across the supply chain: LG Display is meanwhile trying to regain its footing by concentrating on high-value, smaller OLED products while abandoning the low-margin LCD business, and Samsung Electro-Mechanics has joined global price hikes for multilayer ceramic capacitors as AI infrastructure investment worsens supply shortages.
The won's surge has upended the earnings outlook not just for suppliers but for South Korea's biggest exporters generally, turning a year that was supposed to deliver peak-season gains into a scramble for revised business plans.
Sources:
- S.Korean Apple suppliers, including Samsung, LG, face profit squeeze despite iPhone Duo debut (KED Global / Korea Economic Daily)
