Semiconductor Supply Shortage Deepens... Domestic Cars Face Growing Crisis in April

[Asia Economy Reporter Changhwan Lee] As the global shortage of automotive semiconductors continues, domestic automakers are increasingly concerned about production cuts.

According to industry sources on the 28th, Hyundai Motor and Kia have significantly reduced weekend overtime work due to the current shortage of automotive semiconductors, and some parts are reported to have only about one to two weeks of inventory left, indicating severe supply difficulties.

Due to the semiconductor inventory shortage, Hyundai Motor Group, which previously held irregular meetings with automotive semiconductor suppliers, is now conducting these meetings daily. Additionally, for parts with critically low inventory, they are negotiating directly with semiconductor companies without going through suppliers.

The overall inventory of semiconductor-related parts has also dropped to about a month’s supply, raising concerns about potential factory shutdowns starting in April.

The rise in automotive semiconductor prices is also a situation to watch closely. Companies supplying automotive semiconductors to Hyundai Motor and Kia are reportedly purchasing semiconductors at higher prices than usual.

Although supply conditions were relatively better compared to other global automakers, the situation has recently deteriorated significantly.

The UK Financial Times (FT) recently reported that Hyundai Motor was able to endure so far due to securing a large semiconductor inventory last year, but production is expected to be at risk of suspension starting in April.

Korea GM plans to operate its Bupyeong Plant 2 at half capacity next month as well as this month. Since February, Korea GM has reduced the operating rate of Bupyeong Plant 2, which produces the Chevrolet Malibu and Trax, to 50% due to the shortage of automotive semiconductors.

Worsened by Fire at Japan’s Renesas

The shortage of automotive semiconductors worsened due to a fire at the factory of Japan’s Renesas, the world’s third-largest automotive semiconductor manufacturer. Renesas announced that recovery from the fire at its Naka plant in Ibaraki Prefecture on the 19th could take more than a month.

Renesas is a leading company in the microcontroller unit (MCU) field that controls vehicle power and accounts for 20% of global MCU production.

Since Renesas mainly supplies semiconductors to local automakers such as Toyota, Nissan, and Honda, it is known that there is no direct impact on Hyundai Motor and Kia.

However, Japanese automakers, who have not been able to receive parts properly from Renesas, are diversifying their supply sources from other semiconductor companies, which is intensifying the supply shortage across the entire automotive semiconductor market.

An industry official said, "Following the shutdown of local semiconductor plants due to the unusual cold wave in Texas, USA, and the Renesas fire, signs of prolonged production disruptions caused by the global shortage of automotive semiconductors are emerging," adding, "Our companies are also focusing on securing inventory as the situation is expected to worsen."

This content was produced with the assistance of AI translation services.