[Car Talk Forest] Prolonged Vehicle Semiconductor Drought... Can You Get a New Car This Year?

Due to Semiconductor Shortage... Increasing Number of Cars Difficult to Receive Within the Year Even If Contracted Now

Hyundai Motor Ulsan Plant Myeongchon Main Gate
[Image source=Yonhap News]

[Asia Economy Reporter Changhwan Lee] The biggest concern in the automotive industry these days is semiconductors. The semiconductor supply shortage that began at the end of last year has yet to be resolved even after half a year.

The situation is actually worsening. Hyundai Motor Company decided to halt operations on the 17th and 18th at Ulsan Plant 5, Line 2. Ulsan Plant 5 produces the Tucson, one of the most popular models these days, a sport utility vehicle (SUV). Ulsan Plant 3 will also shut down on the 18th. Ulsan Plant 3 manufactures the compact sedan Avante and the small SUV Venue.

Kia is facing a similar situation. Kia also decided to suspend operations at Soha Plant 2 on the 17th and 18th. Soha Plant 2 produces small SUVs such as the Stonic.

The cause of the production line stoppages is all due to the shortage of automotive semiconductors. In the case of Hyundai Motor Group, the semiconductor supply situation was relatively better compared to other global companies until the first quarter, but in the second quarter, they have been experiencing significant impacts. Last month, Ulsan Plant 1 and Asan Plant were shut down, and on the 6th and 7th of this month, Ulsan Plant 4, which produces the Porter, also halted operations temporarily before resuming.

The company views this month as the biggest hurdle related to the semiconductor supply shortage. Hyundai and Kia had already warned of the crisis caused by semiconductor shortages during their first-quarter earnings conference calls.

Joo-Jeong Joo, Vice President and Head of Kia’s Finance Division, said at the time, "The most difficult period for the semiconductor supply issue is expected to be May. Until April, we managed with accumulated inventory, but now stocks are running low, and it is difficult for anyone to accurately predict the extent of the shortage."

As the ‘May bottleneck’ becomes a reality, delivery delays are also occurring one after another. For example, if you sign a contract for the Tucson now, it is practically impossible to receive the vehicle within this year. The delivery schedule itself is uncertain. The Ioniq 5 had over 40,000 pre-orders, but the first month’s delivery volume was only 114 units.

Hyundai recently sent a letter of apology to waiting customers under the name of Eonhwa Yoo, Vice President and Head of Domestic Business Division. In the letter, Vice President Yoo stated, "The main cause of the current vehicle delivery delays is the shortage of automotive semiconductor supply," and added, "We will do our best to deliver vehicles as soon as possible by identifying alternative semiconductor suppliers and improving production operation efficiency."

Even the government has stepped in to resolve the semiconductor issue, but it does not seem easy. The government announced the ‘K-Semiconductor’ strategy, which includes promoting the internalization of the future car core semiconductor supply chain in the mid-to-long term and strengthening cooperation among companies related to automotive semiconductors such as Samsung Electronics and Hyundai Motor Company. However, it is difficult to resolve the immediate supply shortage.

Some predict that the automotive semiconductor shortage could continue beyond next year. Accordingly, production disruptions across the entire automotive industry and customer damages appear inevitable.

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