Hyundai Motor Accelerates Semiconductor Localization

Hyundai Motor plans joint development with domestic firms and broader SiC adoption to improve cost competitiveness. (Yonhap) Hyundai Motor is accelerating localization and supply chain diversification to lower its dependence on overseas companies for automotive semiconductors. As Chinese automakers rapidly catch up by developing their own autonomous driving semiconductors, the strategy is to secure both supply stability and cost competitiveness simultaneously by expanding cooperation with domestic companies. Kim Jong-sun, Vice President of the Semiconductor Development Group at Hyundai Motor’s AVP Division, announced this semiconductor strategy on Oct. 21 at the 2nd Hyundai Mobis Automotive Semiconductor Forum Auto Semicon Korea (ASK) held at the DoubleTree by Hilton Seoul Pangyo in Seongnam, Gyeonggi Province. Kim emphasized, “China has now entered an era where it directly manufactures autonomous driving System-on-Chips (SoCs) and installs them in vehicles,” adding, “It is time for us to look back at ourselves once again in terms of development speed and cost competitiveness.” In reality, the global automotive semiconductor market is dominated by a few overseas companies. According to 2025 data from market research firm Omdia, the market share of the top 5 companies in the automotive SoC market reaches 74%. In the microcontroller unit (MCU) market, which controls various vehicle functions, the top 5 companies also account for 88%. The concentration of overseas companies is particularly prominent in the automotive converter market. The market share of the top 5 companies reaches 96%, with two companies, Texas Instruments (TI, 43%) and Analog Devices (ADI, 42%) of the United States, accounting for 85% of the total market. Even in the image sensor market, the market share of domestic company Samsung Electronics stood at only 5%. To change this structure, Hyundai Motor plans to standardize semiconductor specifications and diversify its suppliers. The initiative aims to lower dependence on specific companies by enabling the compatible use of semiconductors from multiple companies, while also reducing development costs and the burden of parts management. The company will also expand joint development with domestic semiconductor companies. It plans to share the required semiconductor performance and development schedules from the early stages of new vehicle development, and conduct joint verification for application in actual vehicles. Hyundai Motor also decided to participate as a demand company in government research and development (R&D) projects to lower the development burden on domestic companies. Such cooperation is becoming even more important as the electronic and electrical architectures of automobiles change. This is because, while individual semiconductors previously controlled various vehicle functions, the system will transition to integrating functions around a central controller in the future. Hyundai Motor identified high-performance control semiconductors, power management semiconductors, and automotive communication chips as areas where domestic companies can newly enter. Hyundai Motor is also wary of China’s pursuit in the power semiconductor sector, a core component of electric vehicles. The analysis is that China is rapidly building a system to independently produce everything from semiconductor raw materials to finished products based on government support. Joo Jung-hong, Vice President of the Electrification Design Center at Hyundai Motor, said, “Currently, European companies such as Infineon and ST are showing strength in automotive SiC power semiconductors,” and added, “However, what we must pay more attention to is China. China is rapidly building a vertically integrated ecosystem that spans from SiC wafers to semiconductor devices and modules based on government support.” Hyundai Motor evaluated that while European companies lead in quality, Chinese companies show strengths in price and supply capabilities. The judgment is that domestic companies must secure not only technological prowess but also cost competitiveness. Semiconductor localization is also an important task in lowering the cost of electric vehicles. As power semiconductors are core components that regulate the power needed to drive electric vehicles, they have a significant impact on vehicle performance and price. He emphasized, “Power semiconductors account for about 40-60% of the power module cost, so their proportion is extremely high,” adding, “They are directly linked not only to efficiency but also to vehicle price competitiveness.” Accordingly, Hyundai Motor and Kia are expanding the application of next-generation silicon carbide (SiC) semiconductors with high power efficiency. SiC semiconductors can reduce power loss compared to conventional silicon semiconductors, making them advantageous for increasing the driving efficiency of electric vehicles. Following their first application in the Ioniq 5 and EV6 in 2021, the application scope is expanding from the existing 800V-centered systems to 400V systems as well.