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Global Semiconductor Companies Invading Korean Auto Market vis New Eco-friendly Tech
Automotive Semiconductors
Global Semiconductor Companies Invading Korean Auto Market vis New Eco-friendly Tech
  • By matthew
  • June 11, 2014, 03:39
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Global semiconductor manufacturers are paying attention to the Korean auto market, which reflects the reality of the local auto industry. The local industry has a long way to go in the automotive semiconductor sector, even though it has grown to become the sixth-largest in the world. 

US-based semiconductor company Texas Instruments (TI) has been consistently increasing the weight of automotive semiconductors, as seen by the fact that sales of its automotive products accounted for 13 percent of total semiconductor revenues last year. According to research firm Strategy Analytics, the share of TI in the global automotive semiconductor market was about 5 percent in 2013, similar to that of the Bosch Group, the largest auto parts supplier based in Germany. 

The automobile semiconductor market is highly fragmented.Kang Sang-keun, director of TI Korea said, “After former CEO Kent Chon was appointed two years ago, an automotive team was created to concentrate on Korea with a big brand like the Hyundai Motor Company and Kia Motors.” He went on to say, “We will continue to make an investment to bring our automotive experiences accumulated for 30 years to Korea.” The director explained that the company is working on a project aimed at developing technologies related to smart cars in partnership with global automakers such as Hyundai and Kia Motors. Currently, a team consisting of 16 to 17 people is involved in the project. 

Intel, Qualcomm, Freescale, ROHM Semiconductor, and Linear Technology are also actively seeking to dominate the local automotive semiconductor market by entering the field of infotainment, vehicle stability control system, and electronic control units.

The reason for global semiconductor companies’ interest in the local market lies in the fact that the use of semiconductors in cars is on the rise, since smart and eco-friendly cars are becoming popular. According to the Korea Automotive Research Institute, the global smart car market will continue to grow 7.4 percent year-on-year to reach US$274 billion in 2017 from US$190 billion in 2012. On top of that, US-based market research firm HIS reported that semiconductor components needed for one car were worth US$330 in 2012, an increase from the US$200 of 2002. The research firm also said that the demand for automotive semiconductors will greatly increase, since nearly 152 million units are expected to be connected with the Internet by 2020. 

However, the local semiconductor industry has yet to produce any tangible results. In 2009, Samsung Electronics and Hyundai Motor worked together to develop automotive semiconductors, but met with little success. Thus, it is necessary to nurture fabless semiconductor companies so that the auto industry can produce various customized items in a small quantity. 

Given the LG Group’s decision to acquire Silicon Works, which is the nation’s largest fabless semiconductor company, and its willingness to start its automotive electronics business, other local companies are likely to be more engaged in the automotive semiconductor sector. In the case of the LG Group, its affiliate LG Chem, which is the world’s largest medium and large-sized battery maker, would give the group an advantage over rival companies in competition for the auto market.