IT device recovery to power Korean parts makers in 2024

Global sales of consumer information technology electronics such as smartphones, PCs and TVs are expected to rebound in 2024, fueling hopes of an earnings recovery for South Korean parts makers such as LG Display Co. and Samsung Electro-Mechanics Co.

Global smartphone shipments were projected to grow 3.4% to 1.2 billion units next year, according to the latest report from Counterpoint Research, a technology industry analysis firm. Other research firms such as Canalys and IDC Corp. expected the shipments to increase by 5% and 3.5%, respectively, in 2024.

Mobile phone shipments in 2023 are estimated to fall 5% to a decade low of 1.16 billion units, Counterpoint Research said, as higher interest rates amid sustained inflationary pressure hurt consumer sentiment. The supply of the iPhone 14 series also fell as production in China declined late last year due to the COVID-19 lockdown of Zhengzhou where Foxconn operates the world’s largest manufacturing complex for Apple smartphones.

In 2024, global smartphone sales are forecast to rebound on new models equipped with on-device artificial intelligence, a new generation of deep learning technology, analysts said. Samsung Electronics Co., the world’s largest smartphone maker by volume, is scheduled to launch the Galaxy S24 series with on-device AI features on Jan. 17, 2024.

RECOVERY IN PC, TV MARKETS

The outlooks for the PC and TV industries are also bright.

The global PC market is set to return to growth in 2024 with shipments forecast to rise 7.6% to 267.3 million units, Canalys said in its latest report. Global PC shipments are estimated to see a 12.4% for 2023, the research firm said.

“The impact of AI on the PC industry will be profound, with leading players across OEMs, processor manufacturers, and operating system providers focused on delivering new AI-capable models in 2024.,” said Canalys Analyst Ben Yeh, referring to original equipment manufacturers. “These initiatives will bolster refresh demand, particularly in the commercial sector.”

Other research firms also expect a recovery in PC shipments next year. Gartner Inc. predicted 4.9% growth, while IDC and TrendForce Corp. forecast increases of 3.7% and 3.2%, respectively.

Global TV shipments were expected to rise 2.9% to 209.4 million units in 2024 with those of high-end organic light-emitting diode (OLED) models up 16.1% to 6.5 million units, according to Omdia.

TO BOLSTER PARTS MAKERS’ EARNINGS

Such optimism fanned hopes of better earnings for South Korean parts makers, analysts said.

LG Display, the world’s top manufacturer of large-size OLED panels, is likely to turn to the black with an operating profit of 102.3 billion won ($77.8 million) in 2024, analysts’ consensus forecast showed.

That came as the global display market was expected to grow 5.4% to $122.8 billion, according to the Korea Display Industry Association.

LG Display, the top shareholder of which is global home appliance giant LG Electronics Inc., was estimated to suffer a loss of 2 trillion won in 2022, extending its deficit-making streak to three years in a row, analysts said.

Operating profits of Samsung Electro-Mechanics, an electronics component maker, and LG Innotek Co., a major camera module supplier for Apple iPhones, are expected to jump 42.5% and 31%, respectively, to 947.2 billion won and 1.1 trillion won, analysts said.

Write to Ik-Hwan Kim at lovepen@hankyung.com

Jongwoo Cheon edited this article.