German chipmaker Infineon and Korean carmaker Hyundai said they would cooperate in the development of automotive electronics and opened a joint innovation center in Seoul.
The companies said in a statement they would develop automotive electronic systems for Hyundai and Kia brand vehicles and enhance Hyundai's current systems.
Infineon and Hyundai said they had agreed not to disclose financial details of their cooperation.
They expect the first jointly developed products to be used in the 2010 Hyundai and Kia models.
A modern luxury car contains more than 100 microchips.
Infineon shares were up 1.3 percent to 11.23 euros by 1057 GMT, broadly in line with Germany's benchmark DAX index. Hyundai Motor shares closed up 0.7 percent.
At the, Germany, Intel said it had developed a standard for in-car information and entertainment electronics together with Bavarian carmaker BMW.
The first specialized products from cooperations with automotive-electronics suppliers Harman/Becker, Parrot and EDAG Engineering + Design are almost market-ready, Intel's Europe chief Christian Morales said.
For example, he said Harman/Becker would offer voice control for the Apple iPod music player.