LX Semicon, a South Korean company specializing in designing semiconductors for displays, could soon offer a contract to Samsung Foundry to manufacture display driver integrated circuits (DDICs), report multiple publications in the country. The partnership between the two companies is said to strengthen the domestic chip fabrication ecosystem.
A DDIC controls the core functions of LCD and OLED panels, such as switching and displaying. LX Semicon designs these semiconductors and gets these core devices manufactured by Taiwan Semiconductor Manufacturing Co. (TSMC) and SK Hynix System IC. LX Semicon then supplies these DDICs to companies like LG Display, BOE, and CSOT for their LCD and OLED panels that go into devices like smartphones, TVs, and monitors.
LX Semicon was previously part of the LG Group
LX Semicon, formerly known as Silicon Works, was previously a part of LG Group. That's one of the reasons why it didn't involve any business with Samsung Electronics, a direct LG rival. In 2021, however, LG Group separated many non-core units of the company, and as a part of this process, LX Semicon was placed under LX Holdings Group. Since then, LX Semicon has been exploring new opportunities to expand its footprint.
Earlier this year, LX Semicon partnered with Samsung Display to develop DDICs for next-generation OLED smartphone panels. Now, it will not only supply DDICs to one of Samsung's subsidiaries (Samsung Display) but also get these DDICs manufactured by one of Samsung's subsidiaries (Samsung Foundry). LX Semicon is one of the biggest semiconductor firms, spending more than KRW 1 trillion (around $764 million) annually.
This deal could improve Samsung Foundry's financials
LX Semicon's partnership with Samsung Display and Samsung Foundry will create a cycle where South Korean firms design, manufacture, and use a product. As mentioned earlier, it will strengthen the chip fabrication ecosystem in the country. LX Semicon's business will also help Samsung Foundry to gain a foothold in an industry that's going through its worst period.
