Samsung Elec To Provide Foundry Service To US Qualcomm

SEOUL -(Dow Jones)- Qualcomm Inc. and Samsung Electronics Co. have agreed to form a partnership whereby the South Korean company will provide made-to-order chips to the U.S. wireless chipset maker, the companies said in a joint press release Wednesday.

As part of the agreement, Samsung plans to provide technology and manufacturing services in advanced CMOS-based processes to Qualcomm.

CMOS, or complementary metal oxide semiconductor, is the most widely used integrated circuit found in almost every electronic product.

"Our foundry agreement with Samsung will provide an additional source of supply and assist us in our strategy aimed to ensure capacity to support existing and anticipated business growth in both CDMA and WCDMA markets," Qualcomm's President of CDMA Technologies Sanjay Jha said in a statement.

"With a strong commitment to leading-edge technology and state-of-the-art 300-millimeter wafer capacity, we expect to see our strategic foundry business grow with companies such as Qualcomm," said Oh-Hyun Kwon, president of Samsung's system LSI business in a statement.

Qualcomm and Samsung will also collaborate on technology development with plans including the usage of Samsung's 90-nanometer technology to make system-on-a-chip products.

The announcement comes after a Samsung spokeswoman said earlier this month that the company was in talks with partners to supply non-memory chip foundry services.

Samsung, a leader in producing memory chips such as dynamic random access memory, or DRAM, chips used in personal computers, and NAND flash chips used in digital cameras and MP3 players, said previously that it wants to increase its market share in the non-memory chip business.

It has identified the system LSI business as one of the company's future growth engines that will help the company more than double its revenue by 2010, from the KRW78.9 trillion posted in 2004.

Samsung's system LSI business accounted for 3.8% of the company's total sales of KRW14.54 trillion in the third quarter. But Samsung has more than doubled spending on investments for its system LSI business this year, budgeting a total of KRW1.53 trillion, up from KRW740 billion spent in 2004.

-By Yun-Hee Kim, Dow Jones Newswires; 822-732-2165; yun-hee.kim@dowjones.com

-Edited by Costas Paris

(END) Dow Jones Newswires "

Posted to the site on 23rd November 2005