By Kim Yoo-chul
Staff Reporter
Samsung Electronics and Hyundai Motor have formed an alliance for the joint development of system memory chips to be used in Hyundai's eco-friendly automobiles, the Ministry of Knowledge Economy said Thursday.
Samsung will develop System-on-Chips (SoC) for smart-keys and battery sensors for Hyundai's smart and hybrid vehicles, according to the government.
A total of 20 billion won or some $16 million will be spent by August 2010 to develop the intelligent components, with the government providing 9 billion won, ministry officials said.
System chips play a critical role in the stability of entire systems, while memory chips are for just writing and reading data.
System chips represent the next major market for microelectronics, with considerable interest globally in developing effective methods and tools to support them.
Samsung is the world's top memory chip seller. But the Suwon, Gyeonggi Province-based technology giant is just starting in the less-volatile system chip business.
"Samsung is grabbing the chance to sharpen its system chip-related capability thanks to the joint development," a Samsung official said.
Hyundai officials say the partnership is a win-win strategy and it will outline specific system requirement for the chips that the company wants from Samsung.
The world's fifth biggest carmaker is ramping up efforts to strengthen its hybrid car business to satisfy a growing appetite for fuel-saving cars and to improve the image of the company's technology.
"Toward the hybrid pitch, Hyundai hopes to show that it has the technology and the capability to introduce smart cars," Kang Sang-min, an analyst at TongYang Securities, said.
South Korea currently relies on imports to meet its demand for SoCs. The country is the fifth-largest carmaker in the world with 5.27 million vehicles manufactured annually.