South Korea’s top automaker Hyundai Motor Co. will likely entrust the manufacturing of its automotive chips for self-driving vehicles to Samsung Electronics Co.’s foundry division.
Hyundai has expressed interest in utilizing Samsung’s automotive semiconductor production line, which uses the 5-nanometer-based “SF5A” process, to mass-produce autonomous driving chips currently under development by the automaker, people familiar with the matter said on Wednesday.
The two companies are in serious discussions over the matter, sources said.
Industry officials said if the two companies agree to the collaboration, it would be a win-win situation for both.
For Hyundai, partnering with Samsung will ensure a stable supply chain for autonomous driving semiconductors within the country, rather than relying on foreign contract chipmakers, such as Taiwan Semiconductor Manufacturing Co., better known as TSMC.
The automaker is also expected to cut costs if it can work with a Korean foundry player.
For Samsung, securing Hyundai as a major client will bolster its position in the autonomous chip market, which is expected to grow to $29 billion by 2030. This partnership could also pave the way for Samsung to secure additional large-scale orders, sources said.
HYUNDAI TO UNVEIL SELF-DRIVING CARS WITH ITS OWN CHIPS
The trend of automakers independently developing autonomous driving chips was led by Tesla Inc. and is now spreading across the automobile industry.
The paradigm shift aligns with the evolution of vehicles into “software-defined vehicles” equipped with advanced features such as high-end infotainment systems as well as fully autonomous driving technology.
A growing number of automakers are working to design and develop automotive chips to maximize performance.
Hyundai Motor, a unit of Hyundai Motor Group, which encompasses Kia Corp. and Korea’s top auto parts maker Hyundai Mobis Co., has been strengthening its semiconductor development capabilities since last year.
Hyundai is expected to launch vehicles equipped with its own automotive chips as early as 2026.
SAMSUNG’S TRACK RECORD
Samsung has already secured several fabless chip designers and automakers as its 5 nm automotive chip process clients.
In July 2023, Samsung agreed to make Tesla’s next-generation Full Self-Driving (FSD) chips for use in the top US electric carmaker’s Level-5 autonomous driving vehicles.
The chips will go into Tesla’s Hardware 5 (HW 5.0) computers, which the EV maker plans to mass-produce three to four years from now, industry officials said.
Previously, Tesla only partnered with TSMC for the production of the HW 5.0 auto chip.
Samsung and Tesla strengthened their tech alliance after Samsung Group leader Jay Y. Lee met with Tesla CEO Elon Musk in May 2023.
Samsung had been supplying earlier versions of FSD chips to Tesla for EVs such as the Model 3, Model 5, Model X and Model Y.
Samsung fiercely competes with bigger foundry rival TSMC to win automotive chip supply deals.
In February 2023, it clinched a deal to make auto chips for US chip designer Ambarella Inc. Under the deal, Samsung manufactures Ambarella’s CV3-AD685 chip, which processes data for autonomous driving from Level 2 to Level 4.
Samsung has also won a chip production order from Intel Corp.’s autonomous driving tech affiliate Mobileye Global Inc.
The chipmaker provides Mobileye with semiconductors for advanced driver assistance systems (ADAS), key devices for self-driving cars. Mobileye previously secured such chips from TSMC.
By Jeong-soo Hwang
hjs@hankyung.com
In-Soo Nam edited this article.
