Samsung has collaborated with Hyundai Motor Co. to work with the South Korean government and a number of organizations to address the global chip crisis. Both companies and the Korean Electronics Technology Institute, the Korea Automotive Technology Institute, and the Ministry of Trade, Industry, and Energy recently entered into an agreement.
However, since the semiconductor industry is a long-term and capital-intensive industry, the effects of this collaboration could take years to manifest. While the new partnership between Samsung and Hyundai will primarily benefit the local automotive industry, the partnership could have global implications if it succeeds.
South Korean automakers have had to temporarily halt production at their plants many times due to a global shortage of auto chips, especially automotive microcontrollers. South Korea leads the world in microchip, but it lags behind in logic chip technology.
In a bid to become the world’s largest logic foundry, Samsung Electronics has increased its logic chip investment program by 38 trillion won to 171 trillion won ($151 billion) through 2030.
By the second half of 2022, the world’s second-largest foundry, after TSMC, will add a new production line in Pyeongtaek. The line will manufacture 14nm DRAM and 5nm logic chips, all of which will be built on the advanced extreme ultra-thin lithography technology.
Both companies’ partnership is a part of a long-term strategy to support the automotive industry’s growth. They may be the culmination of both corporations’ corporate social responsibility efforts. The aim remains to provide a solid supply base for semiconductor manufacturing in its home market for the automotive industry.