S KOREAN COS OPT OUT OF ALLIANCES WITH FOREIGN FIRMS.

SEOUL, Sept 1 Asia Pulse - Local manufacturers are increasingly considering a breakup of alliances with foreign companies, as their improved business made such tie-ups no longer necessary, industry sources said Wednesday.

LG Electronics Inc. (KSE:066570), South Korea's second-largest electronics maker, Hyundai Motor Co. (KSE:005380), the nation's No. 1 automaker and other major companies have unveiled plans to end their ties with foreign companies.

LG Electronics has been preparing for a breakup with the International Business Machine Corp. in the United States by December.

LG Electronics formed LG IBM, a 49-51 joint venture with IBM Korea, a subsidiary of IBM, in 1996 and has been selling ThinkPad notebook computer series as main items.

Since then, LG IBM has become the nation's No. 2 PC company with more than 400 billion won (US$347 million) in annual sales and a 12 per cent market share.

But recently, LG IBM has been gaining market share in the country's notebook computer market with new Xnote laptop models, which was initiated by LG Electronics. The sales of Xnote models overtook those of the Thinkpad series by a 6-4 ratio.

The rising share of the LG Electronics-initiated model raised the confidence of the Asian company to go forward with the PC business on its own, industry analysts said.