Hyundai May Have A Solution To Chip Shortage Nightmare

Dec. 30, 2021 10:02 AM ET by Roger Biermann Industry News / 2 Comments

The answer is in Hyundai's own backyard.

The automotive world has faced two catastrophic events in the last two years. Firstly the pandemic wreaked havoc with global lockdowns and subsequent plant shutdowns due to infections. And in the wake of that, a global semiconductor chip shortage resulted in massive shutdowns of production for all automakers. Some have found ways around it, like removing certain features in order to prioritize vehicles that require more of these chips, and more chip manufacturers have come into existence while existing ones have pledged higher volumes in 2022.

Hyundai, which has handled the shortage better than most, now has a potential workaround and will leverage fellow South Korean company and tech giant Samsung to restore chip caches as soon as possible.

Hyundai

Hyundai

Hyundai

South Korean President Moon Jae-in has called for closer cooperation between Samsung Electronics and Hyundai Motor, the country's two biggest conglomerates. Monday, he said to the chiefs of the two companies that "it would be great if Samsung and Hyundai Motor had closer business ties in the automobile and semiconductor sectors."

Korea JoongAng Daily, reached out to both, with a Hyundai rep giving a typical "There's nothing we can say about the deal." Surely, if there were no deal to speak of, it could be denied outright, but the representative went on to say, "Even if there was, we can't tell given the mandate of keeping it confidential."

Hyundai

Samsung already supplies memory chips to Hyundai that are used in infotainment interfaces etc of cars like the Ioniq 5, but the semiconductor chips are currently procured from NXP, Infineon, and Renesas.

However, Samsung earlier this year made a statement of intent to invest heavily in automotive chip manufacture. Back in May, Samsung announced an investment worth the equivalent of $144 billion towards the production of "non-memory chips" by 2030. Non-memory chips cover those used in vehicles, computer CPUs, smartphone chips, and camera sensors.

We'll be keeping an eye on developments between the two companies, but at this stage, no comment looks like positive progress.