LG Electronics, Korea’s second- largest consumer electronics company, is moving to develop mobile application processors for smart devices, raising speculation that it is aiming to start rebuilding its long-lost semiconductor business, industry sources said.

An LG Electronics spokesperson confirmed that the company will be mass-producing application processors “soon,” but did not further elaborate.

However, an industry source familiar with the situation noted that LG Electronics will begin mass- producing the mobile chips, which are often referred to as the “brain” of smart devices, within the second quarter of this year.

The processors, designed by LG Electronics and to be manufactured by Taiwan-based foundry TSMC, could be embedded in LG’s next smartphone, the G3, which the tech giant hopes to introduce before June, the source said.

The chip system could also be deployed for LG and non-LG mid- to-low-cost smartphones.

LG has reportedly sought to have its application processors ready in the third quarter of this year, when the G3 was initially planned to hit the market.

The release of Samsung Electronics’ Galaxy S5 has pushed other Korean smartphone manufacturers such as LG and Pantech to introduce their new phones earlier than planned to stay competitive in the market.

Pantech is reportedly aiming to release its follow-up to the Vega Iron ― the Vega Iron 2 ― this month, despite SK Telecom, the country’s largest mobile carrier, facing a business suspension.

LG Electronics could also try to hurriedly introduce the G3 before the summer begins, the source noted, as releasing it during the summer when many consumers go on vacation would not attract attention.

Also, it may lose momentum should the company release the new phone toward the latter half of this year, he said.

By Park Hyong-ki and Kim Young-won
(hkp@heraldcorp.com)