LX Semicon to Make Foray into Automotive Chip Market

LX Semicon has acquired IP, or international property assets of LG Innotek on SiC, or silicon carbide chip design and fabrication processes – a move to walk up a value chain to more lucrative automotive chip market.

The country’s largest fabless chip maker said that it has completed an acquisition deal to buy IP assets of SiC power chip design and fabrication processes from LG Innotek, Korean electronics parts and components makers.

Formerly known as Silicon Works, LX Semicon is one of a newly-born LX Group family members, which is spin off from LG big conglomerate, or group.

LX Semicon has been mainly producing display driver IC chips for LCD and OLED panels, primarily supplying LG Display, Korean LCD and OLED panel makers, a sort of in-house captive market.

Yet, the driver IC chips are low-cost and marginally profitable commodities, undermining long-term growth prospects.

LX Semicon has been in dire need to diversify into more lucrative market segments to ensure long term sustainability.

Based on epitaxial silicon wafer, SiC chips are good fit for LX Semicon, as the start of the SiC chip   will open up new market opportunities for automotive chip market.

SiC chips are sorts of compound semiconductor that are built with silicon and carbon, boasting of far higher breakdown electric field strength and far wider band gap, which require high power voltage to convert back and force between an insulator and a conductor.

So, the SiC chip is widely used with high voltage applications like solar inverters, power supplies, , LEDs,  trains, and wind turbines, which operate at high temperature and high voltage. Yet, the real growth is in automotive markets, especially EV, or electric vehicles, as the SiC chips are used in the on-board charging units in electric cars.

It is no coincidence that LG Electronics is now beefing up its power train business for EVs to create an EV ecosystem from EV battery to electric moto to an inverter.

In doing so, LG established LG -Magana E-Power a JV with Canada’s Magna, a power train maker in July 2021.  

LG Electronics is a crown jewel of LG big conglomerate family. LX Semicon once used to be a family member of LX Semicon.

Worldwide SiC semiconductor chip market is forecast to double from 1.1trillion won in 2021 to 2.17 trillion won in 2022, according to market research firm Yole Development.