“Selling finished goods with good pricing is an old strategy.”
Korea Times has inside word that LG will show off its own ARM-based chip(s armh) at next month’s Consumer Electronics Show. The first such chip is anticipated for web-based television sets and future chips could be used for LG smartphones and tablets. LG reportedly has 550 engineers working chip designs for mobile devices. Engadget notes that TSMC(s tsm) is reportedly making the chips for LG; good for the chip-maker, which could also make Apple’s mobile chips soon.
LG has long been a licensee of ARM chips and last year re-affirmed its use of such silicon with licenses for the latest ARM designs. Of particular note is a license for the Cortex-A15 design, which is just now rolling out: The next generation system-on-a-chip is used by Samsung for its $249 Chromebook.
Why design chips and have someone else build them? It’s too much of an investment to build your own chip fabrication plant for starters. And by customizing a base ARM design, companies can create silicon that’s optimized for specific product features. Apple and Samsung both do this today and even HTC has gotten a little “chippy,” designing its ImageSense digital processing solution for its smartphone cameras.
While these custom chips are kept to in-house products for Apple(s aapl) and HTC, Samsung is generating revenue through sales of its chips; something that LG may smartly be considering in the future.