The Korean government plans to develop its own mobile CPUs instead of importing mobile chipsets.
The government is planning to commercialize a mid-range mobile CPU that can be used in wearable devices and Internet of Things (IoT) products by injecting 35 billion won (US$34.2 million) over the next five years. It is also going to make a high-performance mobile processor by 2025 that can be utilized in smartphones and tablet PCs.
The Ministry of Trade, Industry and Energy (MOTIE) revealed a roadmap for developing a next-gen mobile CPU on May 13 at its briefing on the commercialization of locally-made mobile CPUs. The event was held in the Korea Semiconductor Industry Association’s main office in Pangyo, which is close to Seoul.
Currently, the nation is importing application processors (APs) from ARM and others. As of 2012, royalties for APs are estimated at 350 billion won (US$342 million) per year. If the trend continues, MOTIE predicts that the amount will balloon to 900 billion won (US$876 million) by 2020.
The global CPU market for servers and PCs was worth about US$17 billion in 2013. Intel accounted for 86 percent of the total with US$14.6 billion, and AMD at 9 percent (US$1.5 billion). The market for mobile CPUs, on the other hand, was valued at US$1.1 billion. ARM made up 82 percent (US$890 million), with Cadence Design Systems at 6 percent (US$70 million), and MIPS Technologies 2 percent (US$30 million).
So far, Samsung Electronics, Adchips, the Electronics and Telecommunications Research Institute, the Korea Advanced Institute of Science and Technology, and the Korea Electronics Technology Institute have been successful in developing a mobile processor. However, product performance was not good, and those products were not fully commercialized. As a result, royalties for mobile CPUs have been steadily rising, and the overall profit structure of fabless semiconductor companies has been worsening. Due to these continuing vicious circles, many people in the industry have urged the government to come up with measures to address the problem.