Although the Korean automobile industry is large, local chip manufacturers do not specialize in the field because relatively cheap chips are installed in internal combustion cars, now with the transition to electric cars it will be possible to develop chips with high added value
Samsung Electronics and SK Hynix are turning their eyes to automotive semiconductors as global demand for high-performance, profitable chips for electric vehicles (EVs) grows rapidly.
The two companies hold first and second place in the global memory market, but they do not have much influence on the automotive semiconductor market. According to market research firm Strategy Analytics, Korea accounted for only 2.3 percent of the global automotive semiconductor market based on sales in 2019.
Chips for vehicles powered by an internal combustion engine are generally cheap, which means their profitability is low. Their replacement cycle is also long, lasting more than 10 years. The average selling price of an automotive microcontroller unit (MCU) installed on the brake and steering system to control automotive electronics is much lower than that of mobile application processors (APs). This explains why Korean chipmakers have not actively invested in automotive semiconductors despite a prolonged supply shortage.
However, as demand for high-value-added semiconductors increases thanks to the rapid growth of electric and autonomous vehicles, both companies are expanding their investment in this area to actively respond to change.
In particular, Samsung predicts that the chips will be one of the three most sold types of chips in 2030 – along with server chips and chips for mobile devices.
Since 2020, the electric vehicle market has grown rapidly, and the amount of chips installed in electric vehicles is also increasing sharply due to the advancement of electronic parts technology. A single car powered by an internal combustion engine has 100 to 200 chips installed, while an autonomous vehicle requires thousands of them. Samsung plans to respond to demand for high-performance automotive semiconductors by providing next-generation memory solutions, such as LPDDR5X and GDDR7 chips. Its goal is to achieve leadership of the car memory market by 2025.