South Korean firms Samsung, LG and SK Telecom are to join forces to develop advanced semiconductors for smartphones and digital TV, the country’s government said today. According to an Associated Press report, South Korea’s Ministry of Knowledge Economy said that LG and other local firms will design the chips while Samsung will manufacture and test the products. Meanwhile, SK Telecom, the country’s largest mobile operator, will develop a wireless connectivity system-on-chip for smartphones with other chip makers. The government said it will provide about KRW19.5 billion (US$15.6 million) in funding for the project while the private sector will contribute KRW21.5 billion.

A separate report by Dow Jones Newswires notes that the project marks the first time that Samsung and LG – local rivals in both mobile devices and chips – have worked together. The country could save more than KRW300 billion in imports and could export KRW300 billion in products for the three years after the Samsung-LG chips are made, the Ministry said. A spokesperson for SK Telecom said the operator has initially agreed to launch a research and development project with other local chipmakers for a combined KRW4.8 billion. The smartphone chips will allow users to enjoy Wi-Fi internet connectivity and GPS location service, the spokesperson said.