S. Korea's short-term injection of $179 mln into research to nurture automotive semiconductors

By Lim Chang-won Posted : March 10, 2021, 15:36 Updated : March 10, 2021, 15:36

[Gettyimages Bank]

SEOUL -- South Korea unveiled a short-term injection of 204.7 billion won ($178.8 million) into research and development by next year to nurture automotive semiconductors as a COVID-19 pandemic disrupted
global supply and demand, leading to the shortage of key components such as microcontrollers and a price hike.

A microcontroller (MCU) is a small computer on a single metal-oxide-semiconductor integrated circuit chip. Microcontrollers are used in automatically controlled products and devices, such as automobile engine control systems, implantable medical devices, remote controls, office machines, appliances, power tools and other embedded systems.

According to the Ministry of Trade, Industry and Energy, the global market for vehicle semiconductors is valued at $38 billion. South Korea's automobile industry relies heavily on foreign automotive semiconductors. There is no production process of microcontrollers for vehicles in South Korea.

A COVID-19 pandemic has affected the semiconductor supply chain, prompting automotive electronics suppliers to increase prices for key components such as microcontrollers and power semiconductors. Some automakers have seen slow sales due to the insufficient supply of components. Policymakers agree that disruptions in the supply and demand of semiconductors for vehicles will continue through the third quarter of this year.

"As automotive semiconductors are a key part of the automotive industry, and demand is rapidly increasing due to the transition to future cars, it is urgent to address short-term supply and demand instability and improve a mid-to-long-term supply chain, along with market preoccupancy," Economy and Finance Minister Hong Nam-ki said in a government strategy meeting on March 10.

Together with expanded support for the domestic production of application processors for vehicles, edge computing chips and autonomous vehicle parts, the government decided to acquire next-generation power semiconductor technologies and push for research into new material-based semiconductors.
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