Thu, Mar 03, 2011 - Page 10 News List

LG developing own smartphone chips amid competition

SUPPLY CHAIN:Analysts said this would allow LG to secure key components as well as save on time and costs in developing the latest mobile devices

Bloomberg

LG Electronics Inc, the world’s third-largest maker of mobile phones, said yesterday it was working to develop its own chips for smartphones to strengthen the company’s handset business.

“We’re working on it, but we haven’t come to any specifics we can announce right now,” Ken Hong, a spokesman for Seoul- based LG, said by telephone.

LG would benefit from developing its own chips, known as application processors, by saving costs and time to introduce new devices, said Soh Hyun-cheol, an analyst at Shinhan Investment Corp in Seoul.

In January, the company’s mobile division reported a loss for a third straight quarter after it lagged behind HTC Corp (宏達電) and Samsung Electronics Co in rolling out new smartphones.

“This can be very positive for LG,” Soh said.

“Being able to get key components within their own supply chain can be a good advantage in beating rivals,” Soh said.

MtekVision Co, a South Korean maker of semiconductors used in communication devices, is looking into developing chips with LG, Kim Chang-gyo, a spokesman for MtekVision said, confirming a Feb. 28 report by Digital Times.

Hong neither denied nor confirmed the report.

Samsung and Apple Inc are the only handset makers that design chips that go into their smartphones, said Kang Yoon-hum, a Seoul-based analyst at NH Investment & Securities Co.

LG has used processors from Qualcomm Inc, Texas Instruments Inc and Nvidia Corp in smartphones, Hong said.

LG’s mobile unit aims to return to profit this year by introducing new smartphones, including a model capable of recording 3D images, Park Jong-seok, head of the business, said on Feb. 14.

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