Samsung‘s Electro-Mechanics arm has reportedly been looking for bidders to buy its Wireless Communication business. According to a report, the company might announce a preferred bidder as early as this month. And the deal surely has more than one benefit.

TheElec says that out of nine companies, Samsung Electro-Mechanics has recently narrowed down the bidders to two. It adds that the company will reportedly announce one of the bidders as the “preferred one” by this month whilst starting negotiations of the deal. Although the names of two shortlisted bidders are not known, the report says that they already produce components for Samsung Electronics.

And talking about the deal, as per KB Securities, Samsung is quoting over 100 billion won($89 million).  In return, the bidder will get the company’s wireless business and 100 existing employees. Additionally, the preferred bidder can also enjoy a sweet deal of selling Wi-Fi modules to Samsung Electronics. This is a tempting offer as the company who signs the deal gets a 3x offer for one.

Who is Samsung Electro-Mechanics?

For the unware, Samsung Electro-Mechanics is a subsidiary of Samsung Group. Headquartered in Suwon, Gyeonggi-do, South Korea, the company makes electronic components. Accordingly, the list includes MLCCs(Multi-Layer Ceramic capacitors), RF-PCBs(Printed Circuit Boards). And others like Camera Modules, Network Modules, and semiconductor substrates.

That said, the wireless modules business, which is under its module solutions, reportedly is only 10% out of the company’s entire business. Still, it has been making Wi-Fi, and WiGig modules so far. Here, WiGig refers to a wireless standard that allows Wi-Fi devices to use the 60GHz mmWave for low-latency fast wireless connectivity.

Although we don’t know the real motive of the company for selling this business, we do know that it’s entering the mid-range camera segment after supplying premium smartphones for a while. Accordingly, the company will initially supply camera modules for Galaxy A52/A72, and other budget smartphones going into 2021.

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Samsung Electro-Mechanics will be increasing the number of camera modules for the company’s budget smartphone models. These devices will arrive in 2021 and would also account for over 10 percent of the sales next year, as stated by Samsung.

According to TheElec report, this is the first confirmation that the firm will be supplying camera modules for Samsung Electronics’ budget Galaxy handset models in 2021. Furthermore, the demand for affordable devices with higher end cameras has also risen, such as optical zoom lens, as per Samsung Electro-Mechanics’ during its third quarter conference call.

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At the moment, the company has begun supply 3x optical zoom lenses with optical image stabilization (OIS) in Q3 of 2020, but the production is expected to rise further and will soon be found in mid tier smartphones as well in the near future. This would also lead to a double digit increase for related camera module products in 2021, as noted by the company. The South Korean firm is also planning on supplying the primary cameras on the Galaxy A52 and Galaxy A72, according to sources close to the matter.

Notably, Samsung Electro-Mechanics has also supplied the 3x optical zoom on the recently launched Galaxy S20 FE. Furthermore, the company is planning on increasing the portion of multi layer ceramic capacitor (MLCC) for auto-components to 10% of the total by the fourth quarter. With the North American automobile market also starting to recover, Samsung is expecting growth healthy demands to accelerate its growth.

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The upcoming Galaxy A52 and Galaxy 72 are expected to be the next best-selling smartphones from Samsung. Both these handsets have been leaked once in the past few days. The reports were regarding their cameras. Now, once again, another report from South Korea says that Samsung Electro-Mechanics will be supplying camera modules for the main cameras on these two phones.

According to previous reports, the Galaxy A 52 is said to come with a 64MP quad-camera setup. On the other hand, the Galaxy A72 will be Samsung’s first smartphone with a penta-camera setup. It will also have a 64MP primary sensor and also an 8MP sensor with a 3x telephoto lens. You can learn more about them from here.

Now, a new report by The Elec says that Samsung Electro-Mechanics has won the deal to supply camera modules for the primary (main) cameras on the above-mentioned smartphones. 

This is expected to intensify the competition between other camera module makers in South Korea. That’s because Samsung is reported to launch more multi-camera setup handsets in the coming months. Additionally, some of the high-end Galaxy A series phones are also said to come with OIS (Optical Image Stabilization).

Samsung has been lately focussing more on mid-range smartphones as the Galaxy S20 series did not sell well on account of higher price tags and pandemic. Samsung Electro-Mechanics is known for supplying camera modules for high-end devices but given the current situation, the company announced its plans to enter the mid-range market in July.

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Samsung Electro-Mechanics, an electronic component manufacturing arm of the South Korean giant Samsung, is now considering to enter the mid-range smartphone camera module market. This was announced by the company during its second-quarter earnings call earlier this week, as reported by The Elec.

The company’s Vice President Bae Kwang-wook said that the company demand for camera modules of mid-range smartphones has been on the rise and it anticipates increased demand for the high-resolution sensors and optical zoom sensors.

He added that the company has been planning to enter this market for some time and it plans to compete based on the pricing of the module. Samsung Electro-Mechanics will likely provide high-resolution camera modules for the Samsung Galaxy A-series phones.

Interestingly, the announcement comes just a day after it was reported that Samsung Electro-Mechanics has secured a contract from Apple to supply camera parts as the US-based tech giant looks to diversify its supply chain.

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Samsung Electro-Mechanics, which has supplied camera modules for premium smartphones such as Galaxy S- and Galaxy Note-series, could be entering the mid-range market because of the falling demand for premium phones.

In line with this, it is also being reported that the company could introduce Optical Image Stabilization (OIS), a premium feature, for the upcoming Galaxy A-series smartphones launching next year. It is also planning to offer differentiating features such as better optical zoom and slimmer design.

For the second quarter of this year, the company posted 96 billion won in operating profits and 1.8122 trillion won in revenue, which represents a decline of 41 percent and 5 percent, respectively compared to last year.

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As the United States government continues to impose sanctions against Chinese companies, Apple is now looking to diversify its production and supply chain to reduce its dependence on the Chinese market.

In line with that, a new report coming from Korea claims that Samsung Electro-Mechanics has joined the list of suppliers of Apple for the camera parts. This seems like a major win for the Korean company, which counts Samsung Electronics as its core customer.

The report says that the reason behind Apple selecting Samsung Electro-Mechanics as a new camera lens supplier is to stabilize its supply chain and to reduce the cost. So far, Apple has sourced lenses from Lagan Precision and Genius Electronics.

It’s noteworthy that Samsung Electro-Mechanics has been supplying Laminated Ceramic Capacitors (MLCC) and Flexible Printed Circuit Boards (RF-PCB) to Apple, so the company isn’t totally new to Apple’s supply chain. But for the first time, it will be supplying lens to the company.

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The report further goes on to add that LG Innotek, which has been supplying camera modules to Apple, is also looking to expand its position within Apple Camera SCM as the company is looking for diversification of suppliers.

The development comes after the U.S. Department of Commerce puts sanctions on 11 Chinese companies for suppressing ethnic minorities in China, including O-Film Tech which provides iPhone camera modules. Apple is now expected to shift orders from Ofilm Tech to LG Innotek, which is making camera modules in factories in Gumi and Vietnam.

Apple has recently started producing iPhone 11 in India through Foxconn’s facility near Chennai. It is also being reported that the next-generation AirPods, as well as 2021 AirPods Pro, will be made in Vietnam. The company has already shifted the production of AirPods Pro to Vietnam.

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