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

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

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

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

Since last year, as LG Electronics pulled out of the smartphone business, the center has focused on developing home appliance SoC, and selecting TSMC as the contract manufacturer of these chips. Nevertheless, the center still has the ability to design mobile application processors and other chips.

LX Semicon, which mainly designs the display driver IC, hopes to acquire the center to improve its semiconductor capabilities in other areas such as mobile application processors and power management IC, the sources said. The source also said that showing that the drive IC accounts for more than 90 per cent of LX Semicon's current revenue, LX Semicon wants to reduce this dependency.

LX Semicon was founded in 1999 as Silicon Works by a former LG chip engineer. The LG Group acquired the company in 2014. Since the acquisition, LX Semicon has grown exponentially due to the high demand for OLED, which can be used in LG electronic TVs, and IC, the display driver for LCD TVs.

, LX Semicon's income in 2015 was 535.8 billion won; by 2020, that figure will rise to 1.16 trillion won, more than double the income figure of five years ago. At present, LX Semicon has more than a thousand employees.

LX Group has been promoting the development of LX Semicon as its flagship subsidiary. 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 a SIC center, according to sources.

However, LG Electronics rejected LX Semicon's request for a SIC center through which LG Electronics felt it needed to maintain its competitiveness in semiconductors in order to foster future businesses such as autopilot, robotics and so-called meta-universes.

According to sources, LG Group Chairman Yu Guangmo, Koo Kwang-mo, 's nephew, rejected LX Group's request.

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