Hyundai Mobis Targets Semiconductor Localization Amid 95% Foreign Dependence

South Korea's automotive industry, which has long relied on the export of vehicles, now faces a critical challenge: the increasing dependence on foreign semiconductors. As traditional internal combustion engine vehicles evolve into advanced "electronic devices on wheels," such as electric and autonomous vehicles, the demand for semiconductors has skyrocketed. However, South Korea's automotive sector is heavily reliant on imported semiconductors, with 95% of its supply coming from abroad. Last year, only five domestic companies—Samsung Electronics, Seoul Semiconductor, SK Hynix, Telechips, and LX Semicon—managed to rank among the global top 100 automotive semiconductor firms, collectively holding just a 3% market share. This vulnerability leaves the industry at risk of disruption in an era of rising global protectionism.

To address this pressing issue, Hyundai Mobis, one of the world’s largest automotive parts manufacturers, recently hosted a “vehicle semiconductor forum” on the 29th. The event focused on the theme of “self-reliance,” with the company pledging to work closely with domestic semiconductor firms to develop a local automotive semiconductor ecosystem. The forum, held at a hotel in Pangyo, Gyeonggi Province, brought together CEOs and executives from over 20 leading Korean semiconductor companies, including Samsung Electronics, LX Semicon, SK Key Foundry, Telechips, and FuriosaAI. This marked the first time that automakers and semiconductor companies have jointly explored strategies to tackle challenges in the automotive semiconductor sector under private-sector leadership.

Lee Kyu-seok, CEO of Hyundai Mobis, who organized the event, reflected on the “2021 automotive semiconductor crisis” during the COVID-19 pandemic. At that time, domestic automakers, including Hyundai Motor, were forced to halt production or ship vehicles with reduced features due to semiconductor shortages. Lee, who previously served as head of Hyundai Motor’s purchasing division, recalled the difficulties of that period and emphasized the need for collaboration. “Given our heavy reliance on foreign semiconductors, let’s join forces to achieve localization,” he urged.

◇95% of automotive semiconductors rely on foreign imports

The weak domestic automotive semiconductor ecosystem can be attributed to high technical and quality certification barriers. These components are directly tied to human safety and must withstand harsh driving conditions with exceptional durability and reliability. Unlike general semiconductors, the low-volume, high-variety production model makes profitability challenging. This has allowed traditional leaders such as Infineon (Germany), NXP (Netherlands), STMicroelectronics (Switzerland), Texas Instruments (U.S.), and Renesas (Japan) to build deep moats and dominate the market.

Hyundai Mobis is considered a “latecomer” in this space. After acquiring Hyundai Autron’s semiconductor business in 2021, the company plans to mass-produce 20 million units of 16 types of semiconductors—including power, driving, communication, and sensor chips—through external foundries starting this year. Its goal is to complete development of 11 next-generation semiconductors, such as battery management systems and communication chips, within three years. However, solo development has clear limitations, prompting Hyundai Mobis to call on the semiconductor industry to collaborate.

◇Hyundai Motor: “Double domestic semiconductor adoption by 2030”

Hyundai Mobis plans to deepen cooperation with semiconductor firms following the forum. It will act as a “bridge” to support domestic fabless companies in transitioning to automotive semiconductors, while Hyundai Motor will serve as a reliable buyer. A Hyundai Motor executive in charge of electronic component procurement stated, “Semiconductor purchases, which amounted to 8.3 trillion Korean won last year, are projected to reach 16 trillion Korean won by 2030. However, 95–97% of these purchases still rely on foreign suppliers.” He added, “We aim to increase the localization rate of semiconductor adoption from the current 5% to 10% by 2030.”

Hyundai Mobis proposed standardizing automotive semiconductors to expand their usage. It is already accelerating development with domestic fabless firms Global Technology and Dongwoon Anatech. Though these companies specialize in TV and mobile semiconductors, their collaboration with Hyundai Mobis has allowed them to enter the automotive semiconductor market.

The Hyundai Motor Group aims to build this ecosystem to encompass future growth areas like robotics. Park Cheol-hong, Executive Vice President of Hyundai Mobis, said, “Automotive semiconductors meet high-quality and reliability standards, making them suitable not only for robotics but also for all future mobility business areas.”