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LG Shortage of Qualcomm Chips May Curb Plan to Boost Smartphones

May 17 (Bloomberg) -- LG Electronics Inc., the second-largest handset maker in South Korea, said a shortage of Qualcomm Inc.’s mobile-phone chips may impede plans to raise production and sales of smartphones this year.

“It’s one of the issues that is giving us headaches,” Park Jong Seok, head of the mobile-phone business, said at a press briefing in Seoul after unveiling a new Optimus phone using a Qualcomm chip today. “They aren’t able to give us what we are asking them for.”

Qualcomm, the largest maker of chips for phones, said last month it can’t get enough supply of the latest so-called baseband chips. The San Diego, California-based company is the main provider of chips that offer faster connections to the Internet from mobile devices that use the Long Term Evolution, or LTE, technology. Phone makers such as LG are adopting the technology to lure consumers demanding higher speed.

LG, which was overtaken by Apple Inc. as the No. 3 mobile-phone maker in the world last year, is introducing more Optimus devices using the LTE technology to regain market share. The models helped Seoul-based LG post a 39 billion won operating profit ($34 million) from selling phones in the first quarter, turning around from a 101 billion won loss a year ago.

The company said in February it seeks to sell 30 million to 35 million smartphones this year globally. LG is keeping the target for now, Park said.

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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