Moon Hyuk-soo, president of LG Innotek, told reporters after the 2026 annual shareholders meeting held at the headquarters in Gangseo District, Seoul, on the 23rd. Moon noted the potential for a rebound in results based on reduced depreciation burden and improvements in the expense structure.
Moon also laid out the direction for a business structure shift. He said, "In the past, we simply supplied only hardware as a tier 2, but recently we have been looking to add software and sell in a tier 1 model," adding, "We need to move to this structure to improve profitability." Moon added, "There are limits to lowering costs, so we need to add software to increase value."
The auto electronics business, a core growth pillar, is expected to enter a full-fledged expansion phase. Moon said, "Sales of products that combine AP modules and sensors for Autonomous Driving will start to increase in earnest from the fourth quarter this year," adding, "Auto electronics sales will maintain annual growth of around 20% for the time being."
The semiconductor substrate business is another pillar of the structural shift. Moon said, "Our current substrate business is running at full capacity because production capacity is short of customer demand," adding, "We plan to roughly double capacity through plant expansions." Substrates for servers are expected to begin mass production from next year, and he projected that high value-added products could start contributing to sales in earnest from 2028 onward.
The camera module business will be run to improve efficiency using existing capacity. Moon said, "On cameras, we have secured sufficient production capacity and are moving to make use of it."
The robot parts business has entered the initial mass-production stage, but Moon said it will take time to reach full-fledged growth. "Mass production has already started, but we are currently at the stage of identifying issues with hundreds of units," he said. "Based on customer schedules, large-scale mass production will be in 2027–2028."
He added, "We are developing it as a combined recognition module that integrates a camera and radar, and we are collaborating with major U.S. customers and are also in talks with European customers." However, he added, "It will take about three to four years before it is reflected in the company's results at a meaningful scale."
Securing external technology will be pursued through partnerships rather than mergers and acquisitions. Moon said, "We are working with companies that are good at software, and there will be a related announcement next week."
The company will pursue both shareholder returns and investment. Moon said, "We maintained the dividend payout ratio, but there were times when the dividend amount decreased," adding, "From now on, we will raise both the payout ratio and the dividend amount." He added, "The liability ratio has fallen below 100%, and we have sufficient cash for investment," emphasizing that there is no problem with investment capacity.