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IC shortage is forcing South Korea to go foreign sourcing

Thursday, May 6, 2021

South Korea's trade ministry reportedly sent a letter to four semiconductor companies in late April to request an increase in auto chip supply, including Dutch manufacturer NXP, a long-time collaborator of Taiwan Semiconductor Manufacturing Co. (TSMC).

According to News1 Korea, the South Korean Ministry of Trade, Industry, and Energy has confirmed that a collaboration request was sent to NXP on April 30 in the name of trade minister Sung Yun-mo. Although details of the letter were not disclosed, an industry source said the ministry had asked the company to boost chip production to meet the needs of domestic automakers.

The report said the global semiconductor shortage has caused serious disruptions in South Korea's auto production. Local automotive manufacturers, such as Hyundai and Kia, were forced to suspend production a few times already this year due to this issue.

Although the letter was not directly addressed to TSMC, the Taiwanese company occupies over half of the global foundry market and supplies most of NXP's microcontroller units (MCU).

In March, a delegation from South Korea visited Taiwanese Economics Minister Wang Mei-hua (???) to request assistance to help out automotive semiconductors feeling the crunch. In response, TSMC agreed that it would increase production capacity in South Korea and prioritize clients in the automotive sector.

Similarly, the U.S. has also turned to TSMC for help to provide capacity for its automakers. Commerce Secretary Gina Raimondo said Wednesday (May 5) that Washington has been pushing the Taiwanese firm to prioritize auto chip production in the U.S.

By: DocMemory
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