[ANALYSIS] LG Electronics aims to be bigger player in auto chip market
LG Electronics is expanding its auto chip offerings, building up what has been a small part of its business to seize opportunity presented by the semiconductor shortage.
The company is also starting to develop its own in-house design capacity, moving away from a model where it outsources that part of the process.
It is planning to design and sell its own auto chips, including microcontroller units (MCUs).
Developed to process data for a wide range of auto parts, MCUs have been at the center of the global chip shortage as they are widely used in embedded driving and network systems.
The company's System Integrated Chip (SIC) Center is leading company's auto semiconductor efforts, and the Vehicle Component Solution division will be refining the products for its own use and for external for clients, such as car manufacturers or parts companies.
Automotive components sold by LG Electronics include in-vehicle infotainment and network systems and driving assistance systems.
"All possibilities remain open as we have just received a certificate that ensures credibility and safety for our own chip-design process," a company spokesperson said.
Earlier this month, LG Electronics gained the ISO 26262 "Road vehicles — Functional safety" certification, which deals with the safety of electronic components in motor vehicles. Having the certifications helps in marketing auto chips.
The company has not yet decided on which foundry to use. It already outsources production to Taiwan's TSMC.
"We will continue to secure the capability to improve the functional safety of auto chips to the world's top-tier level," Kim Jin-kyung, head of the company's SIC Center, said in the statement.
Auto chips are in great demand globally, but the market is dominated by a number of companies, including NXP, Infineon and Renesas.
The chips are mostly based on 8-inch wafers, a predecessor to 12-inch wafers, and are manufactured using old fabrication techniques. Given the limited number of manufacturing facilities working with that technology, bottlenecks have resulted.
LG Electronics has been a minor player in the market, and has been a relatively quiet participant. It is now releasing more information about is aims in the auto chip market and is becoming more high profile in the business.
In recent years, the company has invested heavily in its auto parts business, which has lost money since 2016.
BY PARK EUN-JEE [email@example.com]