The global semiconductor shortage has put car manufacturers in a bind, with some contemplating expanding their development of some auto chips.
Volkswagen recently announced it would increase its semiconductor making capabilities as well as strengthening relations with business partners in the sector. There is also speculation that Hyundai Motor is considering internalising parts of its chip requirements.
The country’s leading carmaker was forced to close its Ulsan plant from April 7 to 14, with worries that other plants could also be shuttered due to the shortage.
According to officials, it is “nearly impossible” for a carmaker to fully internalise automotive chip-manufacturing capabilities, as it would need to obtain related technologies for dozens of chips and compete with scores of already existing manufacturers.
“There is no need for the company to fully internalise chip technologies as there are already scores of companies that offer the services,” a Hyundai official said. “But we have been developing our own vehicle chip layouts and plan to expand in this area.”
Industry insiders say producing vehicle semiconductors, which are micro control units (MCUs), have its limitations as it takes around a decade of research before commercialisation, due to conditions linked to safety.
Because of these circumstances, the Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest semiconductor foundry, said vehicle chip sales in the fourth quarter of last year accounted for only 3 percent of its total sales.
Around 98 percent of vehicle chips are imported with no local supply network available for these and other components.
Local carmakers say the current chip shortage is not due to lack of internalised chip technologies but a problem with the value chain from chip makers.
“Currently, many chips are used in vehicles and the number is only expected to rise in the coming years. There needs to be a reduction of chips starting from the design stage. In the future, more semiconductors will be high performance with integrated control systems, thereby needing less individual chips,” said Song Sun-jae, a senior researcher at Hana Financial Investment. “However, the current global shortage in chips is expected to last through the fall.”
Industry insiders predict the automotive chip market will transition from MCUs to application processor (AP) chips that could provide higher quality and efficiency.
“In the future the semiconductor market will transition from an MCU focus to AP,” the Korea Automotive Technology Institute said in a report released Monday.
Currently, around 40 MCU chips are used in a single vehicle but in the next five to six years there will be a swift towards electric and fully self-driving vehicles that will be based on APs, which will only need three chips for each vehicle, the report noted.
This is not a CAPTIS article. Originally, it was published here.