NH Investment & Securities announced on May 22 that it has raised its target price for LG Innotek from 1 million won to 1.2 million won, a 20% increase, citing the company's expansion in autonomous driving-related businesses beyond vehicle camera modules to include application processor (AP) modules and FC-BGA substrates. The firm maintained its "buy" rating on the stock.
Hwang Ji-hyun, a researcher at NH Investment & Securities, noted, "The expansion of the autonomous driving business beyond vehicle camera modules to include automotive AP modules and autonomous driving FC-BGA substrates is a positive development."
According to NH Investment & Securities, the automotive AP module business involves modularizing APs sourced from global companies. The company is currently expanding its production capacity, with mass production expected to begin in the fourth quarter of 2026. Quality testing is also underway for the autonomous driving FC-BGA substrates aimed at North American automotive clients, with mass production anticipated in early 2027 upon approval.
The analysis indicates that LG Innotek is diversifying its risk by expanding its business from a focus on IT sets to the automotive and semiconductor sectors.
LG Innotek has set a target of 5 trillion won in sales from automotive components by 2030. The company expects its automotive component business, which includes communications, lighting, cameras, and battery management systems (BMS), to grow at an average annual rate of 20% over the next five years, surpassing the overall revenue growth rate.
The company's efforts to expand its position within the autonomous driving value chain through partnerships with external firms have also been positively received. Last year, LG Innotek invested in the U.S. lidar company Aeva and is currently collaborating on a multi-sensing module project. Aeva is a company selected for NVIDIA's "Hyperion 10" reference platform.
Additionally, LG Innotek has established a strategic partnership this year with the U.S. autonomous driving software company Applied Intuition. Hwang stated, "Given that the company has secured numerous global top-tier automotive manufacturers as clients, we expect synergies in terms of sales and customer engagement moving forward."
* This article has been translated by AI.
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