Korean media: LG refused to hand over the chip development team to LX Group

According to TheElec, LG Group refused to hand over its chip development team to LX Group, which was spun off from it last year.

Image source: Network

It is reported that LX Semicon has made a request to LG Electronics in the second half of 2021, hoping to transfer the personnel and assets of LG Group's System Integration Chip (SIC) Center.

Under the guidance of the LG Electronics CTO, the SIC Center develops various system semiconductors, such as mobile application processors and SoCs for televisions.

Since last year, as LG Electronics exited the smartphone business, the center has focused on developing home appliance SoCs, while choosing TSMC as the foundry manufacturer of these chips. Still, the center has the ability to design mobile application processors and other chips.

LX Semicon, which primarily designs display driver ICs, wants to gain access to the center to improve its semiconductor business capabilities in other areas such as mobile application processors and power management ICs. The source also said that display drive ICs account for more than 90% of LX Semicon's current revenue, and LX Semicon wants to reduce this dependence.

LX Semicon was founded in 1999 by former LG chip engineers as Silicon Works. LG Group acquired the company in 2014. Since the acquisition, LX Semicon has achieved exponential growth due to the high demand for its display driver ICs for LG electronic TVs and LIQUID DISPLAY TVs.

In 2015, LX Semicon's revenue was 535.8 billion won; by 2020, that number will increase to 1.16 trillion won, more than double the revenue figure five years ago. Currently, LX Semicon has more than a thousand employees.

LX Group has been pushing for the development of LX Semicon as its flagship subsidiary. Sources said koo Bon-joon, chairman of LX Group and former CEO of LG Semiconductor, has a strong interest in the chip business, which is reflected in LX Group's request for the SIC center.

However, LG Electronics rejected LX Semicon's request to acquire the SIC Center, through which LG Electronics believed it needed to maintain its own competitiveness in the semiconductor field in order to nurture future businesses such as autonomous driving, robotics and the so-called metaverse.

Sources said Koo Kwang-mo, the chairman of LG Group,moto-joon's nephew, rejected LX Group's request.

In the past, LG Electronics had considered handing over the SIC center to Silicon Works, but the plan was canceled because Silicon Works was not large enough to accommodate the center.

(Proofreading/Jouvet)