Israeli chip maker Tower Semiconductor Ltd (TSEM.O) said on Monday it would be the exclusive manufacturer of power automotive devices for C&S Technology in South Korea.
C&S Technology, the official automotive device supplier of audio and video systems for Hyundai Motor Co (005380.KS) and its affiliate Kia Motors Corp (000270.KS), will now supply a power device to the auto manufacturers.
The device can integrate multiple integrated circuits that are typically independent within the vehicle, resulting in a more cost-effective solution.
This is the latest in a string of recent contracts for Tower (TSEM.TA) in South Korea.
Tower did not disclose financial details.
A market source estimated full production would start in 2012 and that the deal would be worth $20 million a year.
As more vehicles are being equipped with power, multimedia and network devices, the demand for automotive chips will increase. The percentage of electronic parts used in vehicles is expected to reach 40 percent by 2015 and over 30 percent will have semiconductors, Tower said. (Reporting by Tova Cohen; Editing by David Holmes)