Hyundai appeals to local companies to get chips to diversify supply chain | Automotive industry news

Hyundai Motor Group is in talks with South Korean chip companies to help it reduce its dependence on foreign supplies amid a global deficit that has cut short lines among the world’s automakers, four people familiar with the matter told Reuters.

Hyundai officials have met with local “legendary” companies that develop chips but resume production similar to those of TSMC and Samsung Electronics Co Ltd as it examines long-term strategies to better diversify its supply chain, they say. two people from local legendary companies. who met Hyundai.

The South Korean auto group wants to transfer some of its chip orders, such as microcontroller units (MCUs), to South Korean designers, but technology still lags behind industry leaders such as Dutch automotive chip supplier NXP Semiconductors, Electronics Corporation.

“Apart from the high barriers to entry into the automated chip market, lengthy, rigorous qualification processes make it more difficult for small chip companies to design automated chips. Delivery of automated chips takes four to five years, while it can take less than a year for home appliances.” to design and produce chips, “said a person from the South Korean mythological company.

“The company is pursuing automated chip ‘localization’ programs to diversify supplier chains in South Korea after having chip supply problems, mainly due to suppliers being out of the country. “- said a person from Hyundai’s sister company, Kia.

The group of South Korean automakers includes Hyundai Motor Co. և Kia Corp.

Stricter resources

In the first quarter, Hyundai outperformed its global competitors in an effort to accumulate more chips in anticipation of supply.

But the shortage is exacerbated by factors such as the fire at a chip factory in Aponia, Japan փ Storms in Texas, reaching Hyundai.

The company has stopped production at its plants in South Korea, as well as its production in the United States due to lack of chips.

The sources all spoke on condition of anonymity, as the discussions were private.

Hyundai Motor Group declined to comment.

Hyundai Mobis, the group’s parts company, said in a statement to Reuters: “There are no ongoing discussions with the relevant companies, although we believe that it is necessary to consider the development of chips in the long run, there are currently no detailed directions or specific motives.”

Local companies

As it explores ways to ensure the production of chips by local legendary firms, Hyundai has also turned to contracts with chipmakers known as foundries to discuss possible production plans. A person with knowledge about it told Reuters about this.

“Hyundai has announced plans to build its own in-house chips, but we have not yet made it clear that when it comes to expanding our production capacity, we need to invest,” he said in a South Korean foundry. ,

“Hyundai seems to believe that there will be enough or even more demand for automatic chips even after the recent shortage of this chip has been eliminated,” he added.

The global chip deficit is expected to reach the second quarter of 2022, according to research firm Gartner.

Analysts say foundries do not like to expand production capacity for specific customers, as it can take years to offset the cost of equipment սարք capital investment, և demand can change rapidly.

“Our chips may not become the main chips of Hyundai or replace the chips that are already in use, but ours may be Hyundai’s solution in the event of a lack or failure of the overseas network supply,” said a senior official of the legendary company.

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