With the ongoing chip shortage continuing to disrupt the supply chain, particularly in the automotive segment, Hyundai is turning to resources inside the company to develop future semiconductors as a potential solution.
According to a report from Maell Business New Korea, Hyundai plans to use its Hyundai Mobis division in localizing chip parts. Hyundai Mobis is best known for developing future mobility for infotainment, navigation and safety.
However, the division absorbed the semiconductor business from Hyundai Austron in December of last year and formed a new chip designing team under its own research and development division early this year.
According to the report, the first chips to be developed will be power management ICs and microcontrollers that are critical to electrification — where all automotive OEMs are moving toward as the primary models due to consumer interest and to help combat climate change.
COVID-19 was the root cause of the semiconductor shortage after lockdowns and stay-at-home orders caused much of the semiconductor manufacturing industry to temporarily halt production and companies to reduce capacity.
When demand returned, capacity shifted to other areas, leaving the automotive segment behind. Automotive OEMs now forecast a loss of billions of dollars this year in sales as they have been forced to cut vehicle production. NPR report that just this week, Hyundai temporarily halted production at its Alabama factory due to the global semiconductor shortage.
A solution is not likely experts warn and it may last several years before recovery happens.
Earlier this year, the South Korean government sent a letter to four automotive chipmakers including NXP Semiconductors asking to increase their supply of automotive chips to help with the shortage.
Now it appears the country is taking other measures with Hyundai planning to develop its own chips, which will likely have strong government backing and investment. Additionally, Samsung is reviewing potential cooperation with Hyundai for development of autonomous vehicle chips.
Currently less than 5% of automotive chips are manufactured in Korea with the bulk coming from NXP, Renesas Electronics, Infineon Technologies and Texas Instruments, the report said.
