"May, a Bigger Boritgogae: Automotive Industry's Semiconductor Supply Shortage Concerns"

[Asia Economy Reporter Yu Je-hoon] "Regarding the vehicle semiconductor issue, May is expected to be the most difficult time. It's a tough period. Until April, we still had some inventory kept from before, but now that is almost depleted." (Joo Woo-jung, Vice President, Head of Finance Division, Kia)

The shortage of vehicle semiconductors, which is severely impacting domestic automakers, is expected to worsen further in May. The industry anticipates that factory shutdowns due to semiconductor shortages will continue next month as they did this month.

According to the industry on the 25th, Korea GM has decided to reduce the operating rate of its Bupyeong 1 and 2 plants to about 50% starting from the 26th. Bupyeong 1 plant produces Korea GM's best-selling model, the Trailblazer, while the 2 plant produces the Trax and Malibu.

Korea GM had previously lowered the operating rate of the 2 plant to 50% in February due to semiconductor shortages and had suspended operations at both plants from the 19th to the 23rd. As this situation persisted, CEO Kaher Kazem reportedly visited the U.S. headquarters earlier this month to discuss semiconductor supply issues.

This is not just Korea GM's problem. Hyundai Motor and Kia also managed to overcome the semiconductor shortage without shutdowns until the first quarter, but the impact has become serious starting this month. For instance, Ulsan Plant 1 was closed for a week starting from the 7th, and the Asan plant also suspended operations on the 12th-13th and 19th-20th. Ulsan Plant 1 and Asan plant produce the Ioniq 5 and Grandeur models, respectively.

The concern is that May is expected to be the peak challenge for the semiconductor supply shortage. In a previous conference call regarding this year's business outlook, Vice President Joo stated, "Demand elasticity and new car effects are both favorable, but ultimately success depends on supply risks," adding, "In our judgment, the most difficult time regarding semiconductor issues will be May."

Since the semiconductor shortage shows no signs of resolution, the industry expects partial factory shutdowns to continue next month as well. On the same day, Seo Kang-hyun, Vice President and Head of Finance Division at Hyundai Motor, said, "The semiconductor supply situation is rapidly changing, making it difficult to predict production conditions after May," and added, "We are preparing for the possibility of production adjustments in May at levels similar to or greater than those in April."

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