Four people familiar with the matter told Reuters that Hyundai Motor is negotiating with South Korean chip companies to help it reduce its dependence on foreign chip supplies.

People familiar with the matter revealed that South Korean automobile companies want to transfer some orders for automotive chips such as MCUs to local companies, but their technology still lags behind NXP and Renesas.

An employee of a South Korean chip design company said: “In addition to facing high barriers to entry into the automotive chip market, long and strict certification procedures also make it more difficult for small chip companies to design automotive chips. Generally speaking, it takes four to four to supply automotive chips. Five years, and the design and production of consumer electronics chips may take less than a year."


A person from Kia Motors said: "After experiencing the problem of chip procurement, the company is pursuing a plan to'localize' automotive chips in order to achieve diversification of the Korean supply chain. The reason is that the problem of chip procurement is mainly caused by foreign suppliers. And caused."

Hyundai's performance in the first quarter of this year was better than its global competitors, thanks to the company's aggressive measures to accumulate chip inventories in response to tight supply.

A person familiar with the matter told Reuters that Hyundai Motors is also discussing potential production plans with foundry chip manufacturers while exploring ways to obtain chip designs from local chip design companies.

"Hyundai proposed a plan to produce internal chips, but we have not yet determined any details because we need to invest in expanding production capacity," said a person familiar with the foundry in South Korea.

The person added: “Hyundai seems to believe that even after the recent chip shortage is resolved, demand for automotive chips will still be sufficient or even strong.”

According to Gartner, the global chip shortage will continue until the second quarter of 2022. Analysts pointed out that foundries are reluctant to expand capacity for specific customers because it may take years to recover equipment and capital investment expenditures, and demand may change rapidly.

"Our chips may not become the main modern chips, or replace those already in use, but when there is a shortage or interruption in foreign supply chains, our chips may become a modern solution," a senior official of a chip design company Said.