Government Launches Public-Private Council to Address Vehicle Semiconductor Shortage

[Sejong=Asia Economy Reporter Kwon Haeyoung] Amid the prolonged global shortage of automotive semiconductors, the government has joined forces with the automobile and semiconductor industries to seek solutions to supply instability.

The Ministry of Trade, Industry and Energy announced on the 4th that it has launched the 'Future Car and Semiconductor Solidarity Cooperation Council.'

The council includes Hyundai Motor, Samsung Electronics, Mobis, DB HiTek, Telechips, Nextchip, the Korea Automobile Manufacturers Association, the Korea Semiconductor Industry Association, and the Korea Automotive Technology Institute.

Domestically, capabilities related to automotive semiconductors are still insufficient. Automakers rely heavily on overseas sources for most core automotive semiconductors. Semiconductor companies do not possess production processes for automotive semiconductors.

According to the Ministry of Trade, Industry and Energy, developing core automotive semiconductors takes several years for process development, facility expansion, and actual vehicle testing. Additionally, international standard certification is required, and high reliability and safety must be ensured under harsh temperature and shock conditions.

Accordingly, the government plans to use the council to explore short-term measures to address instability in automotive semiconductor supply and to discuss mid- to long-term cooperation plans to secure a leading position in the future car and semiconductor markets.

As a short-term measure, since the 17th of last month, the government has been supporting the simplification of import procedures for automotive semiconductor parts to prevent disruptions in automobile production. It is also providing urgent support for performance evaluation of automotive semiconductors. In the mid- to long-term, the government intends to strengthen support for technology development and performance certification and build infrastructure to enhance the competitiveness of the domestic automotive semiconductor supply chain.

Kang Kyung-sung, Director of Industrial Policy at the Ministry of Trade, Industry and Energy, said, "The global instability in automotive semiconductor supply is due to a worldwide mismatch in semiconductor supply and demand, making it difficult to fundamentally resolve in the short term. We will use this crisis as an opportunity to enhance competitiveness in future cars and semiconductors."

The government plans to review the opinions gathered from the council, prepare specific measures, and announce them soon after consultations with related ministries.