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Hyundai Has Found the Best Way to Prevent the Chip Shortage from Happening Again

The chip shortage is here to stay in the short term, and now there’s concern its effects would impact certain industries, including the automotive market, in the long term as well.
Hyundai wants to build its own chips 13 photos
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Dealing with the lack of chips has become a global effort, and while foundries are working non-stop on improving the production capacity, others are trying to find a way to streamline the supply chain and reduce the disruptions in their operations.

Carmakers, in particular, have been hit hard by the chip shortage, and more often than not, they have been blamed for sticking with an old approach that has previously worked like a charm.

Most vehicle manufacturers are still using an old chip design, and most of them rely on real-time orders sent to suppliers, therefore avoiding building up inventories for obvious cost reasons. Now that the lack of a chip inventory is proving critical, they are looking into all kinds of approaches to prevent a similar crisis from happening again.

Hyundai is one of the carmakers spearheading the push for a new chip strategy in the long term.

The South Korean company has already confirmed on several occasions that it plans to make its chips in-house, and at CES, Jose Munoz, Hyundai Motor’s global chief operating officer and president of the North American unit, reiterated pretty much the same plan.

We want to have control of our own destiny, he said, explaining that Hyundai just intends to reduce the reliance on suppliers in an attempt to have fewer disruptions to worry about. Munos reminded Hyundai isn’t the only company to be looking into such an approach, but right now, it’s not exactly clear how the whole thing would work, given it lacks the know-how to handle chip design and manufacturing.

Most likely, Hyundai will join forces with a tech partner to work specifically on this front, but for the time being, we’re being told that several approaches are under consideration.

 
 
 
 
 

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