To Diversify Foundry Partners
Silicon Works, a fabless company of LG Group, is considering ways to cooperate with Samsung Electronics. When Samsung Electronics announced the Semiconductor Vision 2030 in late April, it said it would actively support small and medium-sized fabless companies in Korea. Accordingly, Silicon Works is seeking cooperation with Samsung Electronics as part of its efforts to diversify its foundry partners.
Silicon Works is currently oursourcing production of system semiconductor products to SK Hynix System IC, Magna Chip, Dongbu HiTek and TSMC. Its biggest foundry partner is SK Hynix System IC, a foundry subsidiary of SK Hynix, which accounts for 20 percent to 30 percent of its foundry demand.
However, SK Hynix System IC is relocating its Cheongju plant to China, compelling Silicon Works to reduce its reliance on the SK unit and cooperate with new companies in the mid-to-long term. The strongest candidate is Samsung Electronics as it has the most diverse foundry processes. "We are looking for ways to cooperate with other foundry firms, including Samsung Electronics, to reduce our reliance on SK Hynix System IC," a Silicon Works official said.
However, it remains to be seen whether cooperation between Silicon Works and Samsung Electronics will become a reality. This is because there have been not many cases of cooperation between Samsung and LG Groups. In fact, Silicon Works recently joined the 8K TV Association led by Samsung Electronics and suddenly left it. Although the reason for the withdrawal has not been officially stated, industry watchers speculate that some executives of the LG Group might have disapproved of Silicon Works’ participation in the Samsung Electronics-led 8K TV Association. In fact, LG Electronics and LG Display have not joined the 8K TV Association.
"Since Silicon Works was a company that was mainly led by research personnel in Daejeon until it was incorporated into LG Group in 2014, they may not have known the atmosphere of the LG Group," said an official of the Korean business community. “It appears that Silicon Works joined the 8K TV Association in consideration of its businesses, but it might have been difficult for LG Group to hide its displeasure about it.”