Samsung, Hyundai Join Forces to Tackle Auto Chip Shortage | Be Korea-savvy

Samsung, Hyundai Join Forces to Tackle Auto Chip Shortage


This photo taken on April 13, 2021, shows Hyundai Motor Co.'s plant in Asan, South Chungcheong Province, that had to temporarily suspend production due to auto chip shortages. (Yonhap)

This photo taken on April 13, 2021, shows Hyundai Motor Co.’s plant in Asan, South Chungcheong Province, that had to temporarily suspend production due to auto chip shortages. (Yonhap)

SEOUL, May 13 (Korea Bizwire)Samsung Electronics Co. and Hyundai Motor Co. on Thursday said they will work together to tackle the auto chip shortage that has been disrupting global automakers’ operations in the past few months and is expected to continue down the road.

Samsung, the world’s largest memory chipmaker, and the country’s leading automaking group Hyundai signed a cooperation agreement with the country’s industry ministry, Korea Automotive Technology Institute and Korea Electronics Technology Institute to bolster their ties in regards to the automotive chip industry.

Their business cooperation came as the country aims to establish a supply chain amid global semiconductor shortage woes.

The government plans to offer tax incentives and state subsidies for semiconductor companies to spend a combined 510 trillion won (US$453 billion) by 2030.

Details for their cooperation were not available.

“We cannot exclude the possibility of Hyundai getting auto chips from Samsung,” a government official said on condition of anonymity.

South Korean automakers have been suffering from a global shortage of auto chips, particularly automotive microcontrollers, and had to temporarily suspend production at their plants multiple times.

South Korea boasts global leadership in the memory sector, but is relatively weak in the logic chip business.

When it comes to auto chips, the nation only represents a meager 2.3 percent of the market, with the U.S. leading with 31.4 percent followed by Japan with 22.4 percent and Germany with 17.7 percent, according to data from Korea International Trade Association.

The country’s major chipmakers like Samsung and SK hynix Inc. focus on making high-performance memory semiconductors as auto chips are considered less profitable with a complicated qualification process and rigid quality requirement.

The government hopes the latest agreement can boost the country’s self-reliance capability in the auto chip sector and its competitiveness in future vehicles.

While chipmakers lead research and development of core semiconductors, carmakers will focus on providing platforms for testing new auto chips and related parts.

(Yonhap)

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