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| The headquarters of Hyundai Motor and Kia Corp. in Seoul / Courtesy of Hyundai Motor Group |
By Kim Hyun-bin
Hyundai Motor Group is accelerating plans to develop its own automotive semiconductors, spearheaded by auto parts affiliate, Hyundai Mobis. The move is part of a strategy to cope with semiconductor supply shortage risks and strengthen competitiveness in future mobility, as the internal production of semiconductors has become more important than ever amid the transition to electric vehicles (EV), according to industry officials, Sunday.
Semiconductors have become a key determinant in the competitiveness of future cars because EVs and autonomous vehicles require more than 500 to 1,000 semiconductors, which is up to three times the amount used in internal combustion automobiles.
Hyundai Mobis said during a conference call announcing second quarter earnings held last month that it plans to develop and produce automotive semiconductors.
"We are focusing on power semiconductors and are in the process of developing and producing them. We also see system semiconductors as an area of development," Hyundai Mobis said.
Behind Hyundai Motor Group's internalization of semiconductors is the global automotive market's rapid transition to future vehicles such as EVs and autonomous driving.
Power semiconductors, developed and produced by Hyundai Mobis, is one of the key components that can extend the driving range of EVs. High-performance semiconductors are necessary parts of autonomous driving and artificial intelligence (AI).
Around the end of 2020, Hyundai Mobis acquired the semiconductor division of Hyundai Autron, a group affiliate. In March of last year, it announced it was "promoting the internalization of semiconductors."
System semiconductors must be produced directly or consigned through a foundry, and Hyundai Mobis is highly likely to opt for consignment production, because it takes a lot of money and time to build a semiconductor factory.
Currently, six companies, including Renesas of Japan, NXP of the Netherlands, Infineon of Germany, Texas Instruments and Microchip of the U.S., and ST Microelectronics of Switzerland supply 90 percent of the world's automotive system semiconductors.
Korean companies, meanwhile, account for only around 2 percent of the market. There have been very few new players in the sector, as product cycles and warranty periods are long, while profitability is lower than high-performance memory semiconductors.
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