South Korea paid about KRW350 billion (US$342.81 million) in royalties to ARM for AP licensing in 2012, up significantly from KRW180 billion in 2008 and the fee is expected to rise to KRW900 billion by 2020 if the country does not have a home-grown AP architecture.
Seeing the issue, the South Korea government has recently started planning a project to develop an AP architecture via its Ministry of Trade, Industry and Energy (MOTIE).
At the end of the first quarter, the country already had R&D organizations successfully developing a few AP architectures, but they lacked performance and are still unable to be commercialized. Compared to ARM's high-performance highly-convenient AP architectures, South Korea's current home-grown developed architectures will have difficulties to attract vendors.
However, for the short term, the South Korea government plans to pick the most suitable AP architecture developed and invest KRW35 billion to focus on commercializing the architecture from mid-2014 to mid-2019, pushing it into the mid-range mobile device market.
As for the medium to long term, the government plans to enhance the existing AP architecture's performance from 2017-2022, raising its abilities to meet high-end standards. If successful, South Korea will be able to own a South Korea-developed high-performance AP architecture and join the high-end AP competition from 2020-2025.
With China already starting to develop its own AP architecture, South Korea is expected to accelerate its pace on related development and the project is expected to save the country US$900 million in royalties each year after 2020, Digitimes Research observed.
Content from this blog post was provided by the Digitimes Research Tracking team, which focuses on shipment data and market trends in the global mobile device supply chain. Digitimes Research provides quarterly tracking services for market sectors such as Global Tablet, China Smartphone, China Smartphone AP, China Touch Panel, Taiwan ICT and Taiwan FPD. Click here for more information about Digitimes Research Tracking services.