A Consultative Group Formed to Promote Collaboration

Samsung Electronics and Hyundai Motor Group are expected to collaborate in the development and production of automotive semiconductors.

Market research firm IHS Markit said back in January that the ongoing global chip shortage is likely to result in a vehicle production decrease of 672,000 units worldwide in the first quarter of this year alone.

At present, South Korean companies are doing no business in the global automotive chip market and South Korean automakers are completely dependent on imported chips. This type of chips requires a particularly high level of safety and needs to be tailored to different vehicles from the beginning, which means development does not directly lead to mass production.

In fact, this market is still not that attractive to chip manufacturers. This is because the market has high entry barriers, its productivity is still rather low, and it is smaller than the device chip market. The ratio of use of high value-added semiconductor products is higher in the IT device market than in the automotive chip market.

However, the global automotive semiconductor market is growing rapidly along with green car and autonomous driving technologies. According to the firm, the market is expected to grow from US$45 billion to US$67.6 billion from this year to 2026. In this regard, Samsung Electronics vice chairman Lee Jae-yong and Hyundai Motor Group chairman Chung Eui-sun discussed their cooperation in the automotive electronics industry in May and July last year.

In addition, the Ministry of Trade, Industry and Energy formed a consultative group on March 4 so that multiple companies, including Samsung Electronics and Hyundai Motor Group, can better collaborate in the emerging industry. The consultative group will provide assistance in terms of R&D, project initiation, facility and equipment, and so on and detailed plans will be released soon.

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