[Asia Economy Reporters Kim Hyewon and Yoo Jehun] The 'April crisis' triggered by automotive semiconductors has become a reality. Following Korean GM, which has started production cuts due to semiconductor supply shortages, Hyundai Motor and Ssangyong Motor are also showing signs of consecutive production halts. The industry is scrambling to secure semiconductor inventory, but since the supply shortage is a global issue, production stoppages are expected to continue for the time being.
According to the industry on the 7th, Hyundai Motor will halt operations at its Ulsan Plant 1 for one week from today until the 14th. Ulsan Plant 1, with an annual production capacity of 300,000 units, manufactures models such as the Ioniq 5, Kona, and Veloster.
The shutdown of Ulsan Plant 1 was triggered by disruptions in the production of drive motors used in the Ioniq 5, followed by a critical shortage of automotive semiconductors such as microcontroller units (MCUs). The industry expects that this shutdown will cause production delays of approximately 6,500 units of the Ioniq 5 and about 6,000 units of the Kona.
The factory shutdown is spreading like dominoes. Hyundai Motor is reportedly discussing a shutdown of the Asan Plant, which produces the Grandeur, with the labor union. The Asan Plant’s shutdown is also said to be due to a shortage of automotive semiconductor power control units (PCUs).
Additionally, Ulsan Plant 3, which produces the Avante and Venue, is likely to cancel overtime work on the 10th due to semiconductor shortages. Kia’s Hwaseong Plant, which manufactures the K8 and Sorento, also plans not to conduct overtime work this month. Outside Hyundai Motor and Kia, Korean GM is currently implementing a 50% production cut at its Bupyeong Plant 2, which produces the Malibu and Trax.
Ssangyong Motor, which is on the brink of court receivership, will halt vehicle production at its Pyeongtaek Plant for seven days from the 8th to the 16th (excluding weekends). Ssangyong Motor explained that the production stoppage is due to disruptions in the supply of automotive semiconductor components. After operating the plant for only three days in February due to parts delivery refusals by suppliers, Ssangyong Motor is now stopping production this month because of semiconductor supply shortages.
This chain of shutdowns is a consequence of the global semiconductor supply shortage. Automakers including Hyundai Motor are continuing negotiations with semiconductor companies and suppliers to secure inventory, while also exploring measures such as using general-purpose semiconductors as substitutes. However, the general consensus is that these are only temporary solutions.
Japan’s Nomura Securities recently forecasted in a report that global automakers’ production in the second quarter could decrease by approximately 1.6 million units due to the automotive semiconductor shortage. Consulting firm AlixPartners also predicted that the global automotive industry will experience a revenue loss of $60.6 billion (about 69 trillion KRW) this year.
A senior industry official stated, "The automotive semiconductor supply issue is an unavoidable situation, and even if measures are taken to mass-produce semiconductors, it is difficult to resolve the problem in the short term," adding, "It seems highly likely that production disruptions due to semiconductor shortages will partially recur until the end of this year."
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