[News] Hyundai Disbands Semiconductor Strategy Office, Setback to In-house Autonomous Chip Ambition

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As Japanese automakers Nissan and Honda team up to merge by 2026 amid the fierce competition with China’s rivals, South Korean auto giant Hyundai has also made a critical move recently. According to ETNews, the company has disbanded its “Semiconductor Strategy Office,” established in early 2022.

According to industry sources cited by the report, Hyundai transferred the office’s responsibilities to the Advanced Vehicle Platform (AVP) division and procurement departments. The head of the office, Vice President Jae-Seok Chae, who joined Hyundai in 2022 from Samsung Electronics, also stepped down during the reorganization.

Though the system-on-chip (SoC) development team remains, this deals a severe blow to Hyundai’s ambition for developing in-house chips. A Hyundai representative told ETNews that the reorganization is an effort to streamline capabilities and boost synergy.

According to the report, the autonomous driving chip market has been dominated by a few players like Mobileye, Tesla, NVIDIA, and Qualcomm, with Hyundai relying heavily on Mobileye’s ADAS chips.

If in-house development proves impractical, Hyundai may either shift its focus to other semiconductors, abandon the effort, or strengthen its collaboration with AI accelerator firm Tenstorrent, as noted by the report.

The ETNews report also notes that the closure of the Semiconductor Strategy Office suggests a thorough reassessment of Hyundai’s semiconductor projects, while a key program featuring the autonomous driving chip, slated for mass production by 2029, is currently under review.

Another report from the Korea Economic Daily suggests that Hyundai is expected to outsource the production of its self-driving automotive chips to Samsung’s foundry division, and is reportedly interested in adopting Samsung’s 5-nm-based SF5A process.

Samsung, a veteran for producing auto chips, struck a deal in July 2023 to produce Tesla’s next-genFull Self-Driving (FSD) chips for use in the U.S. automaker’s Level-5 autonomous vehicles, according to the Korea Economic Daily.

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(Photo credit: Hyundai)