Korean Industry giants Samsung Electronics, LG Electronics, Samsung Electro-mechanics, LG Display, SK Telecom, SK Telesis, Pantech, and Celrun announced their plan to join hands in the government's "System on Chip (SoC) Development Project" at the Seoul KyoYuk MunHwa Hoekwan's Keomungo Hall on July 27.
Present at the meeting were notable representatives of major government organizations and companies such as Lim Chae-min, vice minister of Knowledge Economy; Kwon Oh-hyun, president of Samsung Electronics; Chang Ki-jae, vice chairman of Dongbu Hitek; Paik Woo-hyun, president of LG Electronics; and Oh Se-hyun, president of SK Telecom C&I CIC. There were also the representatives of Mtekvision, Silicon Mitus, Silicon Works, Xronet, and GCT Research, all of whom vowed to make a strong drive for their joint development project.
Samsung Electronics will produce LG Electronics' Receiving Chip on consignment. Moreover the global cellular phone and mobile communication enterprises Samsung, LG, and SK Telecom will cooperate with fabless semiconductor companies to develop a core chip for smart phones. Previously the companies have been importing smart phone chips from foreign industries. Korea's key enterprises have thus come together to promote both the semiconductor and system industry.
As it is the first time in its ten year history that fabless semiconductor companies are joining hands with large user enterprises, the new alliance will thus mark a turning point in the fabless industry. Particularly, the partnership between two rivals Samsung Electronics and LG Electronics is unprecedented, and is expected to further promote the competitive power of Korea's digital TV industry.
Companies producing large systems and machine components will invest W41 billion (US$33 million) over a year in the development and provision of seven different kinds of SoCs, including a power-control chip, a digital TV receiving chip, a full HD camera chip, and a home entertainment display chip.
The government expects that the completion of the SoC Project will correct the imbalance in the semiconductor industry. It is also estimated that the project will yield W311 billion (US$250.7 million) worth of sales, W100 billion (US$80.6 million) in exports, and W261.6 billion (US$210.8 million) in equipment investment. By 2015, the revenue is estimated to reach W1.8 trillion (US$1.45 billion), and the export W1.2 trillion (US$967.2 million).
"The fact that Korean semiconductors have finally opened the possibility of cooperation after years of fierce competition will raise the expectations of users in the domestic market. It will also be an opportunity for fabless companies to make its leap into the global market," said vice minister Lim.
"Even if the new partnership cannot substitute for all imported chips, which amount to more than 80 percent of all chips used in Korean set enterprises, it will serve as the initial step for Korea in becoming a world power in the semiconductor industry," added Kwon Oh-hyun, president of Samsung Semiconductor.
