Korea’s Presence in Automotive Semiconductor Market Hardly Noticeable

While Korea is a global powerhouse in the semiconductor industry, its automobile sector remains helpless about a shortage of automotive semiconductors. Korean automakers are highly dependent on foreign-made chips as the domestic system semiconductor industry remains weak.

Although Korean chipmakers have secured a 60 percent share of the global memory market, their share is only 3 to 4 percent in the system semiconductor market. According to market research company Omdia, Samsung Electronics is the only Korean company active in the global automotive semiconductor market. It was ranked 24th as of the fourth quarter of 2020 with a market share of less than 1 percent. Samsung Electronics began to introduce system semiconductors for automobiles such as the Exynos Auto and the ISOCELL Auto a few years ago. Yet it has thus far supplied its products to foreign companies including Audi, with domestic sales close to zero. It is not much different for TSMC, the world's number one foundry company. Chips for cars account for only 4 percent of TSMC’s total sales.

Samsung Electronics' Foundry Department also rarely produces system semiconductors for vehicles. As automotive semiconductors are mostly custom-made, close cooperation among carmakers, design companies, and foundry manufacturers is essential. In Korea, however, there are few design companies that serve as a bridge between carmakers and foundry companies.

Hyundai Motor Group set up Hyundai Autron, a chip design subsidiary. The group merged Hyundai Autron into Hyundai Mobis in December 2020 to further strengthen its design capabilities.

Meanwhile, market research firm TrendForce expects the automotive semiconductor market to grow 12.5 percent from US$18.77 billion in 2021 to US$21 billion in 2022. Automobile shipments are expected to reach 83.5 million units in 2022.