The upcoming Consumer Electronics Show 2013 (CES 2013) will see the debut of LG's own in-house designed mobile processors.
Speaking to the Korean Times, LG officials stated that the move to be a major chipmaker is part of the company's strategy to gain a competitive edge in core technologies. Currently, LG has over 900 chip designers working on 28nm mobile processors which are based on ARM's Cortex A15 architecture. As LG does not have facilities to manufacture these chips, it plans to partner with Taiwan Semiconductor Manufacturing Company (TSMC) to produce those chips.
At point of publication, LG Electronics' research center has completed the development of the latest processors for use in the company's Web-connected TVs. The chip designers are also very close to developing the mobile application processor (AP), which is an important component to power smartphones.
The Korean Times - "Selling finished goods with good pricing is an old strategy. We should sell solutions and core technologies. That’s why LG is investing more for in-house technologies for balanced business structures regardless of market situations,’’ said the unnamed executive.
The reasons behind designing and making in-house processors are simple. Companies can better optimize them for use with the hardware and software of their devices. Apple and Samsung are strong proponents of this approach, and their current positions in the market speak for themselves. Huawei also begun designing its own mobile chips this year as it believes that the strategy will enable it to offer mobile devices with longer battery mileage and overall better performance.
In addition, companies will not be subjected to supply shortages if they depend on others to design and make the processors. Earlier in April, China Times reported that HTC has signed the memorandum of cooperation with ST-Ericsson to co-develop its own CPU for entry-level smartphones. It was suggested that HTC wanted to reduce its reliance on Qualcomm, which faced supply shortages of its latest S4 Snapdragon processors.
We've already seen how LG Electronics collaborated with its vertically-integrated sister companies LG Chem, LG Display and LG Innotek for its flagship model, the Optimus G. By moving ahead to design its own processors, we will not be surprised to see LG Electronics give the competiton a run for their money with its future devices.