LG Innotek secures $200 million IFC loan following revenue drop

LG Innotek Vietnam Hai Phong, a subsidiary of Korea-based LG Innotek Co., Ltd., has secured a $200 million loan from the International finance corporation (IFC) to expand its camera module production.

The financing is tied to sustainability targets, supporting the company’s efforts to scale up its optical solutions manufacturing at its Hai Phong facilities.

The Hai Phong operations have emerged as a key production hub, playing a central role in LG Innotek’s global growth strategy.

Consolidated financial statements for LG Electronics and its subsidiaries show that LG Innotek Vietnam Hai Phong recorded nearly 5.76 trillion won (approximately $4.2 billion) in revenue in 2023, up more than 32 per cent year-on-year. Net profit reached about 228 billion won ($167 million), growing faster than revenue.

However, the subsidiary’s performance in 2024 showed a slowdown compared with the previous year, even as LG Innotek globally reported modest revenue growth. Revenue at Hai Phong fell nearly 6 per cent to over 5.41 trillion won, while net profit dropped roughly 18 per cent to around 188 billion won.

The decline stems from Hai Phong’s focus on smartphone camera modules. In 2024, weaker iPhone demand, Apple’s reduced orders, and mounting competition from Chinese suppliers affected production volumes and profit margins. At the same time, LG Innotek’s global business offset these pressures through other segments, including electric vehicle components and IoT solutions.

In September 2025, LG Innotek commissioned its new V3 factory in Hai Phong, spanning 150,000 square meters. The facility is part of a planned $1 billion investment through 2025 aimed at expanding optical solutions production.

While according to IFC: "LG Innotek Vietnam Hai Phong is set to expand its production capacity for smartphone camera modules by building a third factory with IFC’s financing."

The V3 factory doubles the company’s camera module production capacity, enabling it to meet medium- and long-term demand while serving additional clients beyond Apple. The expansion strengthens global supply chains and ensures a large-scale, stable supply for customers.

The project is also designed to transform LG Innotek’s factories into a comprehensive industrial complex, enhancing collaboration with domestic suppliers to meet global standards, increase domestic value creation, and develop a skilled workforce.

Vietnam’s electronics sector accounts for around 40 per cent of total exports and employs over 900,000 people, but it continues to face challenges, including reliance on imported components for final assembly and limited domestic value addition. The Hai Phong expansion is expected to diversify product lines, localize inputs, and implement complex manufacturing processes, boosting the competitiveness of the entire sector.

LG Innotek positions its Vietnamese operations as the main production hub for mainstream camera modules, while its South Korean plants focus on high-value products and R&D.

“IFC’s loan will help enhance LG Innotek’s global business competitiveness as well as improve LG Innotek Vietnam Hai Phong's production capacity and quality,” said Ji-hwan Park, Senior vice president of LG Innotek.

The $200 million financing is structured to encourage the company to meet environmental, social, and governance (ESG) targets. It reflects international investor confidence in both Vietnam’s high-tech potential and LG Innotek’s management capabilities.

“By leveraging IFC’s global network and expertise, we aim to expand ESG-compliant manufacturing capabilities and strengthen our position in the global market,” Park added.

Structured as a sustainability-linked loan, this financing will incentivize LG Innotek to cut greenhouse gas emissions as outlined in its sustainability roadmap. IFC will also help LG Innotek Vietnam Hai Phong develop and implement its sustainability-linked loan framework.

LG Innotek aims to achieve 100 per cent renewable electricity across all its sites by 2030 and attain carbon neutrality by 2040.