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Korea’s LG plans to make its own mobile chips — in Intel’s factories

The move could be a blow to Qualcomm.

Latest Consumer Technology Products On Display At CES 2016 David Becker / Getty

Korean phone maker LG, which has largely relied on processors from Qualcomm, plans to start making a new generation of homegrown mobile chips using Intel factories.

The news, delivered in a single slide at a technical session at Intel’s developer forum in San Francisco, ended months of speculation that such a move was in the works.

LG, which often takes its cue from Samsung, is following its larger rival further into the chip business.

Apple and China’s Huawei also have their own chip designs, while the rest of the phone industry generally uses processors from Qualcomm or Chinese rivals.

Samsung has become one of the leading semiconductor firms in the world, though it not only designs the processors but also has a vast chipmaking operation that makes chips for Apple and Qualcomm, in addition to Samsung’s own processors.

LG will take advantage of Intel’s next-generation 10-nanometer manufacturing technology, a thinner version that will debut next year.

It’s unclear to what extent LG plans to use the homegrown chips. In theory it could be for a wide range of phones and tablets, though realistically LG’s initial use could be far more limited.

An LG representative was not immediately available for comment.

Using one’s own chips can have cost and other advantages, provided the processors can keep pace with rival chips.

Although the chips will be made in Intel plants, it doesn’t mean Intel is having any better luck getting companies to adopt PC-style processors for use in phones. Instead, Intel also announced Tuesday it has signed a new partnership with archrival ARM that will allow other chipmakers to make ARM processors inside Intel factories.

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