Korean car and chip associations sign collaboration MOU

The Korea Automobile Association (KAA) and Korea Semiconductor Industry Association (KSIA) signed a MOU on Wednesday for collaboration.

The MOU singed following the formation of a council for collaboration between the two industries on March 4.

KAA and KSIA’s partnership is done in light of the recent global shortage in semiconductors that affected automobile production.

The organizations will collaborate on developing technology, expanding production facilities, conducting joint review of semiconductors for automobiles and seek out collaborative business models.

The pair will hold periodic seminars to discuss collaboration between the supplier and buyer in the chip supply chain.

The South Korean government has offered tax incentives for local foundry companies in preparation of the shortage prolonging further than expected.

KAA said automobiles currently has 200 to 300 components but this will expand into 2,000 to 3,000 when autonomous cars are commercialized. This makes collaboration between the automobile and chip industries more important than before, the organization said. Local fabless companies also need to increase their technology competence as the current chip shortage stems from reliance on foreign companies, it added.

Hyundai Motor, Kia, General Motors Korea, Renault Samsung and Ssangyong Motor  as well as Silicon Works, Nextchip, Abov Semiconductor, Pixelplus and Neowine attended the first joint meeting between the two organizations. In total, five automobile companies and 15 fabless firms attended the meeting, as well as tier-1 suppliers to the automobile companies, including LG Electronics.