LG Electronics has expressed a greater interest in stepping into the fabless chip-making industry, after having strengthening their own chip production capabilities and bumping their number of chip designers to over 900. Fabless chip-making refers to the outsourcing of chip manufacturing to dedicated fabrication facilities instead of manufacturing chips in-house. Koo Bon-joon, CEO of LG Electronics, strongly believes in the excellent quality of parts produced by these facilities.
According to officials, LG’s research centre has completed the latest of its system chips, the H13, for applications in Web-based TV sets. Due to the lack of its own chip-making facilities, LG has contracted Taiwan’s TSMC – the world’s biggest foundry chipmaker – to produce the new LG-designed chips using a finer 28-nanometer processing technology. Foundries and factories that use metal castings for producing molded finished products have long been in partnerships with fabless companies instead of competing with them, and have proven to be a booming industry owing to their vital necessity in the manufacturing of parts.
LG has made it clear that it’s not simply just buying finished goods for lower pricing but has invested a great deal into self-manufacturing their own branded technology for other industries as a means to establish themselves in the fabless semiconductor industry. LG has employed nearly 550 chip-designers to manufacture chips for smartphones, instead of televisions, and their workforce has already amassed to the level of other top-level fabless chip-makers in the industry. However, there is a reasonable amount of doubt circulating around, a lot of which is regarding LG’s potential and success in the industry, particularly since it has to compete against major fabless chip-makers like Broadcom. To add to this, LG is currently the only user of their own branded chips, using chips designed for smartphones and television sets, and has yet to expand their client base to compete with the likes of its top rival, Samsung Electronics.
While it does stand to reason that LG Electronics is still a fresh company, with respect to the fabless chip-making industry. CEO Bon-joo has granted more authority to chip developers and his hiring of such a great number of experienced chip-makers confirms that LG has decidedly committed to exploring the field of fabless semiconductor manufacturing. For better or for worse, the company has made it clear that they’re in it for the long haul. According to officials, the new LG-designed chip has been scheduled to be exhibited in January’s International Consumer Electronics Show (ICES) in Las Vegas, USA.
