Hyundai wants to develop its own semiconductor chips in order to reduce its reliance on external chip manufacturers, said Hyundai chief operating officer Jose Munoz according to Automotive News Europe. This is to reduce its vulnerability to supply shortages such as that which has affected several automakers.
Though the Korean carmaker had temporarily suspended production at selected factories, Munoz said that the worst of the chip shortage is now over, adding that Hyundai endured its “toughest months” in August and September due to the shortage, Automotive News Europe noted.
With reduced demand for new vehicles through 2020 due to the pandemic, most other automakers also reduced their orders for computer chips. Meanwhile, Hyundai decided to actively stockpile chips in that time, as its procurement division read the trend of the semiconductor industry reducing automotive chip output and advised the advance purchase to avoid running into supply trouble.
“The semiconductor chip industry is reacting very, very [quickly], but also in our case, we want to be able to develop our own chips within the group, so we are a bit less dependent in a potential situation like this. It takes a lot of investment and time, but this is something we’re working on,” Munoz said, adding that affliate firm Hyundai Mobis will play a key role in the in-house development plan.
This will be part of Hyundai’s broader plan to deliver vehicles at a level close to its original business plan for the fourth quarter, and subsequently offset some of the production losses next year, Munoz said.
The automotive sector indicated the likelihood of production slowing down due to chip shortage towards the end of last year, and the dearth materialised with automotive groups including Stellantis, General Motors, Toyota Honda and Mazda announcing disruptions due to the short supply.
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Seriously? When Samsung sees you being a threat, it might buy over Hyundai altogether. Samsung can definitely afford it.
Bad move as it is not within your competency and core business. Semiconductor is a highly advanced and complex industry. You can lose billions making the wrong investment. What you need is a strong procurement that works with semiconductor makers to prevent supply chain issue interrupting your business.