Semiconductor Supply Shortage Spreads... Kia Gwangju Plant 1 Suspends April Overtime Work

Rumors of Weekday Closure at Hwaseong Plant Already Stopped Overtime Work

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Je-hoon] Kia has halted overtime work at its Gwangju Plant 1 in April due to the shortage of automotive semiconductors. The global semiconductor supply shortage is spreading like a domino effect to the domestic complete vehicle industry.

According to the industry on the 8th, Kia decided to cancel the two scheduled overtime shifts at Gwangju Plant 1 this month. Kia's Gwangju Plant 1 produces the Sport Utility Vehicle (SUV) model Seltos.

The cancellation of overtime work is due to the automotive semiconductor shortage that has hit the entire industry. After the Japanese semiconductor manufacturer Renesas experienced a fire accident last month and began overall production adjustments, Kia is reportedly facing difficulties in securing some semiconductors such as the Integrated Body Unit (IBU).

The automotive semiconductor shortage is not limited to Gwangju Plant 1. Kia's Hwaseong Plant, which produces the K8 and Sorento, also canceled overtime shifts this month due to semiconductor shortages. According to labor unions and industry sources, there is a possibility that Hwaseong Plant may suspend operations even on weekdays beyond just stopping overtime work.

A Kia official stated, "Overtime work has always been flexible according to production plans, unlike shutdowns," and added, "Hwaseong Plant is currently not conducting overtime work, but we are not yet considering suspending weekday operations."

At the beginning of this year, Hyundai Motor and Kia were free from semiconductor shortages unlike competing global automakers, but as the situation prolongs, they are gradually being affected. Recently, they have been strengthening contact with semiconductor manufacturers and developing alternatives, but it is still insufficient.

In the case of their sibling company Hyundai Motor, they decided to shut down Ulsan Plant 1 from yesterday until the 14th. This is expected to cause production disruptions of about 6,000 units of Kona and 6,500 units of Ioniq 5. Additionally, Asan Plant, which produces Grandeur and Sonata, is also rumored to be shutting down, and Ulsan Plant 3, which produces Avante, is caught up in rumors of overtime cancellation this week.

Besides Hyundai Motor and Kia, Korea GM has been implementing a 50% production cut and a single-shift system at Bupyeong Plant 2, which produces Malibu, since February. SsangYong Motor will also suspend operations at its Pyeongtaek Plant from today until the 19th. A senior industry official said, "The automotive semiconductor supply issue is an unavoidable situation, and even if measures are taken to mass-produce semiconductors, it is difficult to resolve in a short period," adding, "It seems highly likely that production disruptions due to semiconductor shortages will partially recur until the end of this year."