Positive Domestic Benefit
LX Semicon, a fabless company under LX Group, a conglomerate which was previously part of the LG group, is currently considering delegating the production of next-generation display driver ICs (DDIs) to the Samsung Electronics Foundry semiconductor contract manufacturing division. The collaboration between Samsung and LX is expected to positively affect the domestic semiconductor ecosystem and diversify supply chains, among other benefits.
According to industry sources on July 2, LX Semicon has chosen Samsung Electronics as its foundry partner for the development and mass production of the next-generation chips. LX Semicon, one of the representative fabless companies in Korea, primarily manufactures DDIs that control the pixels of smartphone and TV displays. Its main customers include LG Display and Chinese manufacturers such as BOE and CSOT. Recently, it has been expanding its business to include power semiconductors for displays and microcontroller units (MCUs) for vehicles, while increasing the proportion of products for organic light-emitting diode (OLED) panels, which have a high unit price.
LX Semicon only develops the chips and delegates production to foundry companies, making it one of the biggest players in the foundry industry spending more than 1 trillion won annually. Until now, it outsourced the production of premium products to Taiwan’s TSMC, while mid- to low-end products were handled by SK Hynix System IC. It had no dealings with Samsung Electronics Foundry Division, thought to be due to its affiliation with LG Group until its separation in May 2021.
LX Semicon began collaborating with Samsung at the beginning of this year. Samsung Display, one of Samsung's affiliates, was the first to initiate the partnership. Earlier this year, Samsung Display and LX Semicon decided to jointly research and develop DDIs needed for next-generation OLED panels for smartphones.
LX Semicon and the Samsung Electronics Foundry Division are expected to continue their collaboration on various next-generation chip developments in addition to DDIs. This is seen as significant for strengthening the domestic semiconductor ecosystem. It creates a virtuous cycle where next-generation display chips developed by Korean fab-less companies are mass-produced by Korean foundry companies and supplied to Korean display companies.