LG Electronics and SK hynix talks on SSD controller design reportedly end

LG Electronics’ reported talks to take on part of SK hynix’s next-generation enterprise SSD controller design have ended after the memory maker decided to do the work in-house, according to local media reports.

The two companies held several meetings in July and August over outsourcing part of the controller’s physical backend design to LG Electronics, the reports said, citing semiconductor industry sources. The work involves turning a chip’s circuit design into the detailed physical layout needed before it can be manufactured.

SK hynix recently informed LG that it would handle the work internally, although the exact timing of that decision was not disclosed. Neither company has publicly confirmed the talks or their outcome.

The discussions were notable because LG has been trying to expand chip-design capabilities developed for its own appliances and televisions into services for outside customers.

LG’s chief technology officer organization operates a dedicated system-on-chip center that has designed processors including the DQ-C chip for home appliances and the Alpha series used in premium TVs. A system-on-chip, or SoC, integrates multiple computing functions into a single chip.

Local media reported in June that LG had begun offering application-specific integrated circuit, or ASIC, design services to external customers. ASICs are chips tailored for a particular customer or function rather than general-purpose computing. LG declined at the time to confirm details of the business.

The reported SK hynix project appears to have covered only part of the controller design process, not a full chip-development contract. Established custom-chip providers such as Broadcom and Marvell can offer broader services spanning chip architecture, physical design and manufacturing support.

For SK hynix, the talks came as enterprise SSDs have become a major growth area alongside high-bandwidth memory and AI server DRAM. Enterprise SSDs are high-performance storage drives built for servers and data centers, where capacity, speed and reliability are critical. The controller is the logic chip that manages how data is written to, read from and maintained in the drive.

Market researcher TrendForce said Monday that combined second-quarter revenue of the world’s five largest enterprise SSD suppliers surged 103.6 percent from the previous quarter to $37.59 billion.

SK hynix ranked second with more than $8.63 billion in revenue, supported by stronger shipments of its TLC-based products and ultra-high-capacity QLC enterprise SSDs from US subsidiary Solidigm, according to TrendForce.

Industry sources cited in the original report said SK hynix ultimately preferred internal development over using an outside design partner. They also pointed to practical and security constraints that could have arisen if LG engineers had needed to work inside SK hynix facilities.