[Exclusive] Hyundai Motor's Localization of Car Semiconductor Parts... Barely Prevents Suspension of 3rd Plant

Hyundai Motor Develops Alternative to Japan's Renesas Semiconductors, Prevents Additional Shutdown at Ulsan Plant Recently

Hyundai Motor Ulsan Plant Export Loading Dock (File Photo) [Image Source=Yonhap News]

[Asia Economy Reporter Changhwan Lee] It has been confirmed that Hyundai Motor Company, together with its partners, developed some vehicle semiconductor components, narrowly averting the shutdown crisis at Ulsan Plant 3.

As the vehicle semiconductor shortage is expected to prolong, Hyundai plans to actively develop domestic products that can replace imported ones in collaboration with domestic partners and affiliates, minimizing production disruptions.

However, since it is impossible to develop hundreds of vehicle semiconductor components in a short period, the spread of shutdowns that began at Ulsan Plant 1 is inevitable.

According to the automotive industry on the 8th, Hyundai recently succeeded in domestic production of some semiconductor components, which had mainly relied on imports, in cooperation with a domestic mid-sized electronics company, Company M. These products include the Integrated Body Control Unit (IBU) and Electronic Control Unit (ECU), which comprehensively control automotive electronic systems.

These products had been largely imported from overseas, but last month, a fire at Renesas in Japan caused supply difficulties. As inventory rapidly depleted and Ulsan Plant 3 faced a shutdown crisis following Plant 1, Hyundai quickly began developing substitutes with its partners.

An industry insider said, "Due to the fire at Renesas, a Japanese vehicle semiconductor company, Hyundai also faced a severe shortage of some semiconductors, putting Ulsan plants at additional risk of shutdown," adding, "They urgently developed substitutes with domestic partners to put out the fire."

Hyundai expects the vehicle semiconductor supply shortage to continue at least until the second half of this year and is accelerating substitute development. Compared to the latest memory semiconductors, vehicle semiconductors do not require highly advanced process technology, and some domestic mid-sized companies are known to be capable of producing substitutes with similar performance.

Accordingly, Hyundai plans to strengthen collaboration with key partners and actively promote semiconductor localization. On the 17th of last month, Hyundai signed cooperation agreements with eight vehicle parts companies including Mando and 15 fabless companies to discuss vehicle semiconductor localization.

Its affiliate, Hyundai Mobis, also announced at a new technology conference last week that it is promoting vehicle semiconductor localization. The acquisition of the semiconductor business division from Hyundai Autron, a Hyundai Motor Group affiliate, at the end of last year is also part of the semiconductor localization effort.

Kim Young-kwang, Executive Director at Hyundai Mobis, stated, "Most semiconductors used in Hyundai vehicles are general-purpose," adding, "We will resolve short-term supply issues by finding substitutes with similar performance and assembling them."