South Korean electronic parts suppliers Samsung Electro-Mechanics Co. and LG Innotek Co. anticipate gains after Sony Corp., a strong player in global image sensor industry, made it official to withdraw from the dual camera module business citing sluggish smartphone market and production disruption from earthquakes in April.

Sony on Tuesday released its forecast on fiscal 2017 that runs from April 2016 to March 2017 and said that it will terminate its dual camera module business. It added that it booked 30 billion yen ($273 million) loss from all its production facilities in Kuramoto, southern Japan, which was hit hard by the earthquakes last month. Market watchers predict it would take long for the Japanese electronics giant to restore its Kuramoto production base where Sony’s dual camera module assembly lines are.

Korean suppliers will likely fill the void after their Japanese rival’s exit. Currently, only a few companies around the world - Korean electronic parts makers Samsung Electro-Mechanics and LG Innotek, as well as Sony - own the technology to manufacture dual camera modules for smartphones. “Following Sony’s departure, it is likely that LG Innotek would become a sole provider of dual camera modules for Apple Inc.’s iPhone 7 series,” said Oh Se-joon, an analyst at Heungkuk Securities.

A dual camera module is two sets of a camera module - hardware with a lens, a processor, and an image sensor - put together to provide wider angle and better zoom quality. The manufacturing cost is higher than one camera module. The latecomers in the smartphone industry, China-based Huawei, Oppo, and Vivo are gearing up to upgrade their smartphones with dual camera modules to catch up with market leaders, and the global big players Apple and Samsung Electronics Co. are also planning to add dual camera modules to their next flagship models.

“Dual camera module business is expected to benefit local electronics parts makers as its demand is high and its unit price is higher than the other components,” said an unnamed industry expert.

LG Innotek share edged down 0.2 percent to 88,500 won on Friday, taking a breath after a winning streak over the past two sessions, and Samsung Electro-Mechanics share closed up 1.7 percent at 53,200 won.

By Lee Gi-chang

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