By Kim Tae-gyu
Samsung Electronics and Hyundai Motor are Korea’s flagship companies. The common expectation would be that the two outfits cooperate briskly in wading into the global markets.
However, this is not the case as amply demonstrated by the fact that Hyundai Motor, the world’s No. 5 automaker, does not use semiconductors of Samsung Electronics, the global leader in memory chips.
``A car is made up of around 20,000 components and a fourth of them are electronic ones that include semiconductors. We import semiconductors from the United States, Germany and Japan,’’ a Hyundai representative said.
``We do not procure semiconductors from domestic makers because their quality is not that good, yet. Our major partners are Infineon of Germany and NEC of Japan to name a few.’’
Currently, Samsung Electronics churns out automobile semiconductors, which are used to activate engines or LEDs, at its system LSI division on top of its main items of memory chips.
The entity’s cross-city rival Hynix Semiconductor, the world’s runner-up manufacturer of memory chips, doesn’t roll out products for vehicles. Hence, Hyundai’s comments should be about Samsung.
Some observers point out that other reasons might lurk beneath the lack of cooperation between the country’s two iconic corporations.
``Automobile semiconductor makers need to be involved in the development of cars from the initial stage. Accordingly, they need to deeply trust each other. I suspect that Hyundai might avoid Samsung since Samsung Group advanced to the auto-making business in the 1990s,’’ said a Seoul analyst who asked not to be named.
``It is bad for Korea that the country’s top two companies do not cooperate in a full-fledged manner for some reason. In particular, futuristic smart automobiles employ an increasing number of semiconductors. I hope that they will collaborate to strengthen the competitive edge of each other.’’
Following the will of tycoon Lee Kun-hee, Samsung Group established Samsung Motors in 1995 but the business faltered in the aftermath of the Asian financial crisis in the late 1990s.
In an effort to sever non-core businesses, the group put Samsung Motors up for sale. Daewoo acquired it first but the group itself collapsed and resold the Samsung unit to Renault.
Hyundai Motor was considered as a suitor but time-honored strife between Samsung and Hyundai as the top two chaebol in Asia’s fourth-largest economy made the deal impossible.
Lots of international automakers have minted close partnerships with semiconductor suppliers from their home turf. For example, BMW is tied up with Infineon while Toyota goes hand in hand with Toshiba.
When contacted, a Samsung Electronics representative said that the firm supplies automobile semiconductors but not to Hyundai. With regard to the quality complaints of Hyundai, he refused to comment.
Hyundai Motors is led by Chairman Chung Mong-koo while Samsung’s head is Lee.