South Korea Still Has Long Way to Go in Automotive Semiconductor Industry

South Korea’s global automotive semiconductor market share stands at 2.3 percent.

The Korea International Trade Association said in its report on March 29 that South Korea is one of the world’s top seven automobile manufacturers with a production share of 4.3 percent and yet its global automotive semiconductor market share stands at 2.3 percent.

According to the report, the United States accounts for 11.7 percent of the global automobile production volume, followed by Japan (10.5 percent) and Germany (5.5 percent). In terms of exports, their shares are 8.1 percent, 11.9 percent and 17 percent, respectively. The three countries’ shares in the global automotive semiconductor market are 31.4 percent, 22.4 percent and 17.4 percent, respectively.

South Korea’s shares in terms of production volume and exports are 4.3 percent and 4.6 percent. Its share in the global automotive semiconductor market is 2.3 percent.

“South Korea’s high dependence on imported automotive semiconductor chips is because the market has high entry barriers, it is more difficult to realize an economy of scale in the industry and the margin of the item is lower than those of other industrial semiconductor products,” the association explained, adding, “In addition, more than 70 percent of South Korean semiconductor manufacturers are running advanced processes mainly for IT devices whereas old processes are widely used in the automotive semiconductor industry, which means an increase in production within a short period of time is structurally difficult.”

“The importance of the industry will continue to increase along with the development of automotive electronics, inter-vehicle communication, autonomous driving, and so on,” the association pointed out, continuing, “South Korean automakers need to become capable of producing high-performance chips for use in in-vehicle infotainment, advanced driver assistance, self-driving, etc.”