Electronics

According to reports, Samsung Electro-Mechanics Corporation recently officially announced the termination of its rigid-flex PCB (RFPCB) business. Based on previous reports, Samsung Electro-Mechanics plans to only produce RFPCB until November. Previously, the company had been producing such products at its factory in Vietnam.

RFPCB is used to connect motherboards and circuit boards, camera modules, and OLED panels. Its combination of rigidity and flexibility facilitates internal design by mobile phone manufacturers. RFPCB can also send signals from the display control board to the display panel faster, which is more expensive than FPCB higher.

Years of losses are the main reason why Samsung Electro-Mechanics decided to "broken arms." Prior to this, Samsung Electro-Mechanics' main customers for this product were Apple and Samsung Electronics. According to statistics, Apple’s annual sales are about 300 billion won, and Chinese mobile phone manufacturers and Samsung Electronics’ annual sales are 100 billion won.

However, Samsung Electro-Mechanics loses about 50 billion won (about 272 million yuan) every year. The company said that after exiting the RFPCB business, although sales will decline, overall profitability will improve.

Samsung Electro-Mechanics’ latest dream direction is high-end ABF carrier boards mainly used for servers and PC processors. According to media reports, the company is planning to install a new ABF carrier board production line at its Vietnam factory, with an estimated investment of about 1 trillion won ( 837.5 billion U.S. dollars).

For the RFPCB business, Samsung Electro-Mechanics has decided to go, and the most critical question at the moment is who will replace it and take over major customers like Apple.

According to previous plans, the RFPCB required for iPhone 13 will be distributed by Korean companies. Among them, BH company provides 50%, Samsung Electro-Mechanics provides 30%, and Young Poong Electronics provides 10%.

As Samsung Electronics clearly will withdraw from the business, other suppliers are expected to increase supply. THEELEC also said that Interflex, a subsidiary of Young Poong Electronics, may also re-enter Apple's RFPCB supply chain.

In addition, in recent years, Apple intends to introduce more Chinese suppliers, such as Luxshare Precision becoming the first iPhone foundry in mainland China. Therefore, domestic PCB companies are also expected to use this to cut into Apple's supply chain.