Last year, MCNEX celebrated its 20th anniversary and is maintaining its position as the number one company in the domestic automotive camera module market and the fifth globally. The goal is to become the third-largest global company in five years.
Min Dong-wook (55), representative of MCNEX, met with CHOSUNBIZ at the MCNEX headquarters in Incheon on the 19th of last month. He graduated from the Department of Electrical Engineering at Dongguk University and worked as a research and development (R&D) engineer at Hyundai Electronics and Pantech & Curitel before founding MCNEX in 2004.
MCNEX grew after localizing the camera modules that it had been reliant on Japanese imports, selling them in overseas markets such as Japan and China. It was registered as a primary supplier to Samsung Electronics in 2007 and entered the KOSDAQ market in 2012, later transferring its listing to the KOSPI in 2021.
MCNEX manufactures camera modules for smartphones and vehicles. In the first three quarters of last year, it recorded sales of 758.9 billion won and an operating profit of 25.9 billion won. The mobile sector accounts for 70% of sales, while the automotive sector makes up 30%. MCNEX supplies camera modules and actuators to smartphone manufacturers, including Samsung Electronics' Galaxy S series, and its major automotive customers include Hyundai Motor, Kia, Volvo, and China's Geely.
Min noted, "Currently, we rank third among domestic smartphone camera module corporations after LG Innotek and Samsung Electro-Mechanics. In the automotive market, we hold the number one position domestically and the fifth globally."
He identified proactive investment in research and development (R&D) to prepare the necessary technology for clients as the secret to MCNEX's growth. Min explained, "From the beginning of the business, we have invested 4% to 7% of our sales into R&D over the past 20 years, with 65% of our 480 employees at headquarters working in R&D, assigning R&D personnel by department."
He stated that with the emergence of the artificial intelligence (AI) market and advancements in vehicle technology, the electronic parts market, including camera modules, is rapidly changing. Min remarked, "While the smartphone market is not growing as explosively as before, I believe the incorporation of AI features will stimulate consumer replacement demand. The expansion of vehicle models equipped with autonomous driving levels 3 and 3.5 is expected to increase the supply of camera modules."
The technology level for autonomous vehicles is classified into six levels, from 0 to 5. Currently, the highest level is 4. Level 0 is "non-automation," while level 1 and 2 support vehicle steering or speed control, and both. Level 3 denotes automation where the driver does not need to hold the steering wheel. The number of cameras required for Level 3 exceeds 10, more than double that of Level 2 (5 to 6).
Having celebrated its 20th anniversary last year, MCNEX aims to continue its growth as a medium-sized corporation with sales exceeding 1 trillion won. Min stated, "In five years, we have set the goal of not only expanding our market share in the automotive sector but also achieving sales of 1.5 trillion won." The following are questions and answers with Min.
—What is the background behind the founding of MCNEX?
I began my career as an R&D engineer at Hyundai Electronics after being hired through public recruitment by the Hyundai Group. At that time, Japan was a leader in small camera module technology. Samsung Electronics, LG Electronics, and Hyundai were all importing from Japan. There were instances where supply from Japanese companies was not smooth, so I determined that if I could localize camera modules, we could enter the supply chain. Since founding the company in 2004, we started supplying to domestic medium-sized corporations and to Japanese companies such as Casio and Hitachi, achieving growth. We proved our technological capabilities and entered the supply chain of large domestic corporations including Hyundai Motor and Samsung Electronics.
—What was the secret to securing clients like Hyundai Motor and Samsung Electronics?
Min stated, "As our clients compete in the global market, we must also equip ourselves with the corresponding technological capabilities. Since the outset of MCNEX, we have invested 4% to 7% of our sales into R&D for the past 20 years. Of our 480 headquarters personnel, 65% are R&D staff, with R&D personnel assigned by department. To create an environment that allows for a focus on R&D, we built a new office in Songdo and transferred there two years ago."
Automobiles and smartphones are improved every year with new products. To deliver products in line with this, it is crucial to establish advanced development and mass production facilities to meet the specifications required by clients. MCNEX has built four factories on a site exceeding 100,000 square meters in Ninh Binh, Vietnam.
—With emerging opportunities in the electronic market such as autonomous vehicles and software-defined vehicles (SDV), what is MCNEX's strategy?
Min noted, "As in-vehicle software technologies such as advanced driver-assistance systems (ADAS) improve, hardware performance to support these systems becomes increasingly important. This is why the number of cameras in each vehicle is necessarily increasing. Although the proliferation of electric vehicles and other electronics may temporarily delay, we expect to see significant growth once technical challenges are resolved, stimulating consumer demand."
Starting this year, MCNEX is expanding its high-end product offerings for the level 3 to 3.5 market. It is also quite encouraging that our primary clients, Hyundai Motor and Kia, are increasing their market share. We plan to increase supplies to European companies such as Volvo and Benz.
—Demand recovery for IT devices like smartphones is slow.
He remarked, "The global uncertainty created by wars in Europe and the Middle East has dampened consumer sentiment. However, I believe these anxiety factors will gradually dissipate over time. Most importantly, smartphones equipped with AI capabilities are expected to stimulate replacement demand, and the timing for smartphone replacements is also approaching, making this year's market situation more positive than in previous years. While explosive growth is not expected as when smartphones first appeared, the market is anticipated to grow larger."
—Last year marked your 20th anniversary; what are your future goals?
Currently, we are in the number one position in the domestic automotive camera module market and fifth globally. In the smartphone camera module market, we rank third domestically after LG Innotek and Samsung Electro-Mechanics. Our 480 domestic employees and over 3,000 overseas staff must drive even greater growth than we see now. Our goal is to achieve sales of over 1.5 trillion won by our 25th anniversary and over 2 trillion won by our 30th anniversary.