This article is by Sarah Chea and read by an artificial voice.



When the global semiconductor shortage swept the world during the Covid-19 pandemic, Hyundai Motor's factories had no choice but to halt production, leaving thousands of workers idle at home. This was because it lacked the expertise and capabilities in developing automotive chips despite its global dominance in automotive and chip manufacturing.

Hyundai Mobis took the lead to address the persistent challenge by forming a strategic alliance with 23 local chipmakers, including Samsung Electronics and SK keyfoundry, creating a dedicated task force to advance automotive semiconductor technology.

The Korea's largest auto parts maker on Monday held an Auto Semicon Korea forum, inviting some 80 executives from 23 local chip-related companies - including Samsung Electronics, LX Semicon, SK keyfoundry, DB HiTek, GlobalFoundries, Dongwoon Anatech and Korea Electrotechnology Research Institute - to discuss their potential collaboration in sharing technologies to develop automotive chips.

Under the partnership, Hyundai Mobis aims to independently design and manufacture more than 10 automotive chips, like electronic control units (ECUs) and microcontroller units (MCUs) within the next two to three years.



"We already witnessed how chip shortages could bring production lines to a standstill during the Covid-19 pandemic, and forged a strong consensus on the critical need for domestic alternatives," Hyundai Mobis President Lee Gyu-suk said at the forum, which Hyundai Mobis plans to hold annually as a regular platform for dialogue and cooperation.

"The development process is long and the qualification standards are exceptionally rigorous, making market entry difficult for newcomers. Nevertheless, Hyundai Mobis is committed to leading the effort to establish a private-sector-led value chain - spanning from design to mass production - in collaboration with some 23 local companies across the country."

Demand for automotive chips is surging as cars are getting electrified and going autonomous. Roughly 200 chips are needed in the internal combustion engine models, while some 1,000 are needed in EVs, and over 2,000 in fully autonomous cars.

But Korea's presence in the automotive semiconductor market remains marginal as currently, 95 percent of them are sourced from abroad. Some 40 MCUs are essential per vehicle, and currently, Taiwan's foundry giant TSMC dominates about 70 percent of the global MCU supply through contract manufacturing.

Hyundai Mobis said it has already reached the near completion of a joint development project with GlobalFoundries and Dongwoon Anatech, focused on next-generation automotive lamps and power drive semiconductors. Mass production is scheduled to begin as early as next year.

"Hyundai Mobis is mass-producing 16 types of in-house-developed semiconductors as of now, including those for power, drive, communication, sensors, and data processing, through external foundries, with total output reaching some 20 million units," said Park Chul-hong, executive vice president heading the semiconductor business at Hyundai Mobis at the forum.

"Broader participation from domestic companies will accelerate semiconductor localization, yielding substantial economic ripple effects," Park said. "Integrated development of power semiconductors and key components could shorten R&D timelines by nearly two years compared to developing each separately."

Chips developed through this partnership are expected to be supplied to Hyundai Motor and Kia in the short term, with plans to expand supply to overseas companies over the long term. During the Covid-19 pandemic, Hyundai and Kia faced production disruptions affecting 470,000 vehicles due to semiconductor shortages. The companies have since announced targets to localize up to 10 percent of their semiconductor procurement by 2030.

The automotive chip market is growing at an average annual rate of 9 percent, and is projected to hit $1...