Hyundai Motor Accelerates Semiconductor Localization

Hyundai Motor is intensifying efforts to localize semiconductor production and diversify its supply chain in order to reduce reliance on overseas companies for automotive semiconductors. This strategy aims to enhance both supply stability and cost competitiveness by strengthening partnerships with domestic companies. Kim Jong-sun, Vice President of the Semiconductor Development Group at Hyundai Motor's AVP Division, announced this move during the 2nd Hyundai Mobis Automotive Semiconductor Forum Auto Semicon Korea (ASK) on October 21 at the DoubleTree by Hilton Seoul Pangyo in Seongnam, Gyeonggi Province.

Kim highlighted the fact that China has entered an era where it directly manufactures autonomous driving System-on-Chips (SoCs) and installs them in vehicles, signaling the need for Hyundai to reassess its development speed and cost competitiveness. The global automotive semiconductor market is currently dominated by a few overseas companies, with the top five companies accounting for 74% of the SoC market and 88% of the microcontroller unit (MCU) market.

This concentration is particularly notable in the automotive converter market, where the top five companies hold a 96% share, with Texas Instruments and Analog Devices controlling 85% of the total market. In the image sensor market, Samsung Electronics' share is only 5%. To address this imbalance, Hyundai Motor plans to standardize semiconductor specifications and expand cooperation with domestic companies, enabling the use of semiconductors from multiple suppliers and reducing development costs and parts management burdens.

The company will also participate in government R&D projects to alleviate the development burden on domestic companies. Hyundai is particularly concerned about China's growing presence in the power semiconductor sector, a crucial component of electric vehicles. While European companies like Infineon and ST excel in quality, China is rapidly developing a vertically integrated ecosystem, from semiconductor raw materials to finished products, based on government support.

Hyundai Motor recognizes that domestic companies must not only develop technological capabilities but also achieve cost competitiveness. Semiconductor localization is also crucial for lowering the cost of electric vehicles, as power semiconductors, which regulate the power needed for electric vehicles, significantly impact vehicle performance and price.

Hyundai Motor and Kia are expanding the use of high-power efficiency next-generation silicon carbide (SiC) semiconductors, which can reduce power loss compared to traditional silicon semiconductors, thereby increasing electric vehicle efficiency and competitiveness.