Hyundai Motor in talks with chipmakers to cut exposure to shortage

Hyundai Motor
Hyundai Motor in talks with chipmakers to cut exposure to shortage

SEOUL: Hyundai Motor Group is in talks with South Korean chip companies to help it reduce reliance on foreign supplies amid a global shortage that has halted assembly lines at automakers around the world, four people familiar with the matter told media.

Hyundai officials have met with local “fabless” firms – which design chips but outsource manufacturing to the likes of TSMC and Samsung Electronics Co Ltd – as it explores long-term strategies to better diversify its supply chain, according to two people at local fabless firms who met with Hyundai.

The South Korean auto group, which houses Hyundai Motor Co and Kia Corp, wants to shift chips such as microcontroller units (MCUs) to South Korean designers, the people said.

Such a shift will be hard, though, because local technology still lags industry leaders such as Dutch automotive chip supplier NXP Semiconductors and Japan’s Renesas Electronics Corp, industry experts said.

“On top of facing high entry barriers to the auto chip market, long and strict qualification processes make it more difficult for smaller chip companies to design auto chips,” a person at a South Korean fabless company said.

“It would take four to five years to supply auto chips, while it could take less than one year for designing and producing chips for home appliances,” the person said.