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Lee Jae-gyu, CEO of FineTechnics IT division, holds a hinged folding phone made by FineTechnics. Anyang = Reporter Kim Byeong-geun
In the mid-2010s, a crisis occurred at Finetechnics, a manufacturer of LED (light-emitting diode) lighting and mobile phone parts, and Nextchip, a manufacturer of image processing semiconductors for vehicle security cameras ( CCTV). As Chinese companies grew significantly, sales earnings for major products began to decline.
The opportunity to overcome the crisis was in an unexpected place. When we found a new market to apply the core technology we had cultivated, the way was opened. Finetechnics is a hinge for folding phones and Nextchip is reorganizing its business by focusing on image recognition semiconductors for autonomous vehicles.
○ Polished mold technology is the cornerstone
In 2018, Fine Technics posted an operating loss of 17.8 billion won. Sales also declined for the second year in a row. While the LED lighting market deteriorated due to oversupply caused by Chinese companies, smartphone spare parts sales were also difficult due to advances from Huawei and Xiaomi.
However, in 2019, operating profit turned black at 6.9 billion won, and the earnings turnaround was successful. The secret lies in the hinge of a cell phone that was shut down from production nine years ago. In the era of feature phones, when mobile phones were divided into a screen part and a button part, a hinge was a key part connecting the two parts. However, when the era of smartphones began, hinges became unnecessary parts. That is why the company changed its core business to the production of smartphone housings, entered the LED lighting market and the production of closed hinges.
However, when Samsung Electronics introduced the folding phone, Hinge emerged again as a new business area. This is because the folding phone that folds and unfolds tens of thousands of times has become a key component responsible for the durability of the product along with the screen. The hinges, affected by increased and reduced surface area with each fold and unfold, must be strong enough to withstand the resulting stress.
Finetechnics solved various technical difficulties by applying polished metal processing technology while manufacturing smartphone cases with past hinge production knowledge. This is the secret to Samsung Electronics’ exclusive supply of folding phone hinges such as Galaxy Fold 1, Jet Flip and Galaxy Fold 2.
The share of folding phone hinge sales, which is 60% this year, will continue to rise to 70% next year and 80% next year. Lee Jae-gyu, CEO of Finetechnics IT Division, said: “The hinge that shone in the past has become an indispensable part of information technology (IT) products in line with the demand of the consumers and the era of the fourth industrial revolution. “We are developing the technology so that it can expand.”
○ Opportunities found in driverless cars
Nextchip is also pioneering a new path after suffering from China’s low-cost offensive in the CCTV business. Imaging semiconductors made by Nextchip dominate those made in China in object recognition and lighting processing, but declining profits was inevitable. This is because a number of consumers prefer Chinese-made semiconductors, which are inexpensive, even if the quality is poor. Nextchip management, seeking a new market for high quality, paid attention to the emerging autonomous car.
Cameras are one of the main means for autonomous vehicles to recognize their surroundings. The faster and clearer recognition of lanes, obstacles and pedestrians, and their transmission to the driver assistance system (ADAS), is directly related to the vehicle’s driving safety. In particular, the ability of cameras to correctly recognize objects even with contrast changes and in bad weather was a field that Nextchip has been working on since the early development of semiconductors for CCTV.
To survive in the competition with Chinese companies, the efforts of NeXTchip, which began developing semiconductors for autonomous vehicles in 2013, are gradually paying off. Imaging semiconductors for autonomous vehicles will be developed next year and in serious production from 2022. A Nextchip official said: “Since it is difficult to enter automotive semiconductor for the first time, once production starts, it will become into a stable client “.
Anyang = Reporter Kim Byeong-geun / No Gyeong-mok [email protected]
