Samsung Ready to Produce "AP Integrated Chips" for Low-priced Phones

SEOUL, KOREA-  Samsung Electronics plans to produce mobile AP integrated chips that combine mobile AP with modem, in the fourth quarter of this year at the earliest.The company has been a dominant player in the mobile AP single-chip market but stayed away from the production of integrated chips due to considerations of license issues with Qualcomm.

If Samsung Electronics makes entry into the integrated chip market, it will likely to face a head-on competition with the market's No. 1 and No. 2 players, namely Qualcomm and MediaTek.

Samsung's decision to enter the integrated chip market comes after the demand for such chips increases at a rapid pace, driven by that from emerging markets, mostly notably China. Another factor is that it hopes to minimize the damage caused by Apple shunning Samsung for iPhone 6 AP.

A high-ranking official at Samsung Electronics said on July 15, "The mobile AP integrated chip market is expanding steadily. Given that this market is growing fast, we have no reason not to produce integrated chips."

Thus far, Samsung Electronics has prepared to produce integrated chips quietly but thoroughly. It acquired CSR of the UK, which has a wireless telecommunications technology, for US$310 million in July 2012, while establishing a Modem & Connectivity (M&C) task force inside its System LSI Division last year.