By Yoon Ja-young
LG Group is restructuring its system semiconductor business in a move to enhance corporate efficiency. Its affiliate Silicon Works will be in charge of designing timing-controller (T-Con) chips for organic light-emitting diode (OLED) TVs. The system Integrated Chip (SIC) Center, which has been developing LG Electronics' semiconductor under the leadership of its chief technology officer (CTO), meanwhile, will be designing system semiconductors for home appliances and smartphones.
Local media reported Friday that 10 researchers of LG Electronics will move to Silicon Works this month. The company is asking those who have been designing T-Con chips for OLED TVs if they want to move to Silicon Works. The group has been concentrating semiconductor design functions, previously also shared by LG Electronics and LG Display, to Silicon Works.
OLED T-Con chips control the amount of data sent to display driver ICs (DDI), which control the pixels of the display to represent diverse colors. So far, the SIC Center under LG Electronics' CTO has been in charge of developing the OLED T-Con chips.
LG acquired Silicon Works, which designs system semiconductors such as display driver IC, in 2014. It currently holds a 33 percent stake in Silicon Works, which has been supplying driver ICs for LCD and OLED panels of LG Display.
LG Electronics announced Wednesday that it will hand over all the assets and human resources related with the OLED TV T-Con chip business to its affiliate Silicon Works, so that it will be in charge of the display system semiconductor business of the LG Group. They will be transferred on July 1 at 48 billion won.
LG Electronics, meanwhile, will be concentrating on system semiconductors for home appliances and smartphones. It is also expected to concentrate on development of AI semiconductors and chips for 5G telecommunications, which could be future growth engines of the group.
Analysts expect the transfer to benefit Silicon Works.
“The profitability of OLED TV T-Con is high compared with other products. Its operating profit will notably improve in the latter half of the year,” said Chung Won-suk, an analyst at Hi Investment and Securities.
“Silicon Works was previously engaged in the Driver IC chip business for OLED TVs. With the transfer, it added the T-Con chip business, getting closer to being vertically integration with its system semiconductor business,” said Claire Kim, an analyst at Daishin Securities.
“The transfer of business will work positively for Silicon Works since its status will be enhanced as the only supplier of semiconductors within LG Group,” she added.
Silicon Works fell 2.31 percent to 38,000 won Friday, following a 14.08 percent rise on Wednesday. Its share price remained the same on Thursday.
According to HIS Markit, the liquid-crystal display (LCD) TV shipments rose 7.5 percent to 50.1 million units in the first quarter compared to the previous year, while OLED TV shipments jumped 115.8 percent to 470,000 units.