Israeli chip maker Tower Semiconductor has said it would be the preferred 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 and affiliate Kia Motors, will now supply a power device to the auto manufacturers, Reuters reported.

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 in South Korea, the news agency noted.

Tower did not disclose financial details but a market source estimated full production would start in 2012 and that the deal would be worth US$20m a year.

As more vehicles are being equipped with power, multimedia and network devices, the demand for automotive chips will increase. Tower said the percentage of electronic parts used in vehicles is expected to reach 40% by 2015 and over 30% will have semiconductors, the report added.