Samsung is taking a 10 per cent stake in fellow South Korean handset maker Pantech, with local news reports noting that the companies already have “strong ties” in terms of component supplies.

According to Yonhap, the $47.6 million deal will “further help solidify bilateral cooperation in smartphone and other business areas”.

The deal will make Samsung the third largest shareholder after Qualcomm and Korea Development Bank.

Qualcomm acquired its stake through the conversion of royalty debts (apparently worth $75 million) into equity.

Yonhap said that in 2012, Pantech purchased parts worth KRW235 billion ($211 million) from Samsung affiliates, including displays and batteries.

Industry observers noted that while the companies are set to have a closer relationship, it is unlikely that this will develop beyond components into mobile devices, where the two are competitors.

Indeed, Samsung already has supplier relationships with companies where it otherwise competes fiercely, most notably with Apple.

While Pantech is less well known than its rivals Samsung and LG Electronics, it has been expanding its reach beyond its home market.

It also offers devices in Japan, and has supplied multiple products to AT&T and Verizon Wireless in the US.

Unlike some other ambitious APAC smartphone players, Pantech’s efforts are not solely focused on the low-end.

Earlier this year, it unveiled a high-spec phablet, with 6-inch 1080p display and 13 megapixel camera.

Also announced this year was a “premium LTE smartphone” called Vega Iron (pictured), which it described as “the world’s first phone with an endless metal rim”.

Previously, Pantech claimed to have offered the first device powered by a 1.5GHz dual-core processor, in the shape of the million-selling Vega Racer.