Subscribe
E-Paper
 |
| A Hyundai Motor worker checks a Sonata passenger car at the company's Asan production plant. Courtesy of Hyundai Motor |
By Kim Hyun-bin
Local car manufacturers such as Hyundai Motor and GM Korea are faced with unionized workers threatening to strike over wages.
However, a report shows local car makers will continue to face chip shortages, which could hinder their profitability throughout next year.
A report released Monday by the Korea Automotive Technology Institute (KATECH) shows the chip shortage is expected to continue through next year.
"The semiconductor shortage is expected to hit its peak in the second quarter and start to see gradual recovery through 2022," KATECH said. "The automotive industry needs additional supplies to normalize operations from the current delayed production."
The institute predicts it won't be until January of next year that TSMC, the world's largest system semiconductor producer, will be able to meet global automotive chip demand.
TSMC was able to increase its share of the global market for microcontroller units (MCU) and now accounts for over 70 percent of the global foundry market for those chips. MCUs are essential components for a wide range of automotive parts, from air-bag and motor controls to tire pressure monitors and lighting systems.
"The automotive chip market is not too appealing as it has a small profit margin and complex safety issues need to be addressed to make them usable in automobiles. Samsung Electronics vowed to inject 30 trillion won by 2030 in the sector, but it won't be able to chase TSMC's market share as it is increasing investments in the sector as well," an industry official familiar with the matter said.
Experts believe there needs to be increased cooperation between automakers and semiconductor manufacturers.
"The U.S. and Japanese governments have been leading the way to ensure factory operations and … enhance cooperation between car manufacturers and chipmakers, but there is a lack of cooperation between Korean carmakers and the local semiconductor sector," KATECH said.
Intel entered the foundry business and is set to supply Ford and GM with chips after mass production starts within September of this year. Japan's Toyota and Denso have bought stakes in Renesas Electronics, one of the world's largest automotive semiconductor makers, and established a joint company called MIRISE to increase cooperation.
On top of the chip shortages, unionized workers at Hyundai Motor and GM Korea are on the verge of holding a strike unless their wage demands are met. Last week, 74 percent of the 48,600 Hyundai Motor union members showed their agreement by voting in favor of a strike.
The union demanded an increase of 99,000 won ($87) in base monthly pay, while wanting 30 percent of the company's annual profit as performance bonuses for all employees. They also demanded to extend the retirement age by four years to 64.
The company rejected the union's request and made a counter offer by increasing the base salary by 50,000 won, one month of salary plus 3 million won per worker in performance based pay and 2 million won in bonuses.
A majority of GM Korea's union members also favored a strike with 86.6 percent of 7,635 members voting to down tools.
