Hyundai Will Produce Its Own Chips To Overcome Dependence On Third Parties

The Hyundai car factory will be able to supply chips from in-house production. (photo: doc. unsplash)

JAKARTA - Hyundai Motor's global chief operating officer said on Wednesday October 13 that the South Korean automaker wants to develop its own chips to reduce dependence on chipmakers.

The global shortage of semiconductors, fueled in part by a surge in demand for laptops and other electronic products during the pandemic, has shut several auto production lines globally this year.

Hyundai has temporarily suspended some factories, but the company's global COO, Jose Munoz, told reporters the worst had passed for the industry's chip shortage, adding that Hyundai had its "toughest months" in August and September.

"The (chip) industry reacted very, very quickly," Munoz was quoted as saying by Reuters. He added that Intel is now investing a lot of money to expand the capacity of their chip factory.

"But also in our case, we want to be able to develop our own chips within the group, so we're a little less dependent in a potential situation like this," he said. "This requires a lot of investment and time, but it is something we are working on."

He said it was part of the Hyundai Mobis affiliate that would play a key role in the in-house chip development plan.

He also said Hyundai Motor aims to deliver vehicles at the rate of its original business plan in the fourth quarter, and offset some production losses next year.

Along with Toyota and Tesla, Hyundai is one of a handful of automakers to increase global sales despite a shortage of chips.

“Hyundai decided not to cut orders during the pandemic, after seeing Asian markets recover stronger than expected,” Munoz said.

Munoz, president of Hyundai Motor North America, said the company was on track to produce electric cars in the United States by 2022, and was considering upgrading its existing plant in Alabama and increasing its production capacity.

He said the US government needed to extend its proposed $4,500 tax credit incentive for US electric vehicles made at non-union factories as well as union ones. "American workers are the same," he said. "We want this to be the same for all."

US plant Tesla and foreign automakers such as Hyundai and Toyota Motor are not unionized.