LG Innotek ventures into automotive AP module market

LG Innotek Co., a major South Korean electronics parts developer, has forayed into the automotive application processor (AP) module market, poised for 22% annual growth in the next five years.

The company, also a major camera module contractor for Apple Inc., announced on Wednesday that it has developed automotive AP modules and plans to start mass-producing them in the second half of this year.

An automotive AP, which serves as the brain of a vehicle similar to a computer's central processing unit (CPU), plays a crucial role in controlling safety systems such as advanced driver assistance systems (ADAS) for autonomous driving as well as in-car infotainment systems.

The company is betting big on automotive AP modules as global demand for vehicle AP modules is forecast to grow from 33 million units in 2025 to 113 million in 2030 at an annual growth rate of 22%.

With the addition of automotive AP module development to its business portfolio, LG Innotek hopes to raise 5 trillion won ($3.5 billion) in sales from its entire automotive electronics business by 2029.

LG Innotek has been expanding its presence in the automotive electronics industry as part of efforts to reduce its heavy reliance on Apple for camera modules.

HIGH-VALUE ADDITIONS

The company foresees high-value addition by applying its expertise in high-density and precision technologies earned from its core substrate and communication module businesses to automotive AP module development, said an unnamed company official.

“With a plan to mass-produce them in the second half of this year, we have been meeting global semiconductor companies in North America to market our products,” said the official.

LG Innotek will develop AP modules for vehicles with APs offered by chip companies.

A general AP module for vehicles is compact, measuring 6.5 x 6.5 centimeters, but it houses more than 400 components, including a system-on-chip for data, graphics, display and multimedia processing, as well as memory semiconductors and a power management integrated circuit.

The company boasts the industry's best technology in integrating multiple components on a single substrate.

LG Innotek’s compact AP module is expected to allow more design flexibility in cars.

Its high-density circuits will also significantly reduce power consumption with the shorter signal paths between components, which will enhance the module’s overall performance, said the company.

Write to Chae-Yeon Kim at why29@hankyung.com

Sookyung Seo edited this article.