Samsung Electronics and SK Hynix are turning their eyes to automotive semiconductors as global demand for profitable high-performance chips for electric vehicles (EVs) is growing rapidly.

The two companies are holding first and second place in the global memory semiconductor market, but they do not have much influence on the automotive semiconductor market. According to market research firm Strategy Analytics, Korea accounted for a mere 2.3 percent of the global automotive semiconductor market based on sales in 2019.

Semiconductors for internal combustion engine-powered vehicles are generally cheap, which means their profitability is low. Their replacement cycle is also long, lasting for more than 10 years. The average selling price of a microcontroller unit (MCU), a vehicle semiconductor mounted on the brake and steering system to control automotive electronics parts, is much lower than that of mobile application processors (APs). This explains why Korean semiconductor makers did not actively invest in automotive semiconductors despite a prolonged supply shortage.

However, as demand for high value-added semiconductors has increased thanks to the rapid growth of EVs and autonomous vehicles, Korean companies are expanding their investment in this domain to actively respond to the change.

In particular, Samsung Electronics predicts that automotive semiconductors will grow into three major chips, along with those for servers and mobile devices, in 2030. Since 2020, the EV market is rapidly growing, and the amount of semiconductors installed in EVs is also rising sharply due to the advancement of electronic parts technology. One internal combustion engine-powered car has 100 to 200 parts, while an autonomous vehicle requires thousands of them. Samsung Electronics plans to respond to demand for high-performance automotive semiconductors by supplying next-generation memory solutions such as LPDDR5X and GDDR7 chips. Its goal is to claim the No. 1 position in the automotive memory market by 2025.

Samsung Electronics and SK Hynix are turning their eyes to automotive semiconductors as global demand for profitable high-performance chips for electric vehicles (EVs) is growing rapidly.

The two companies are holding first and second place in the global memory semiconductor market, but they do not have much influence on the automotive semiconductor market. According to market research firm Strategy Analytics, Korea accounted for a mere 2.3 percent of the global automotive semiconductor market based on sales in 2019.

Semiconductors for internal combustion engine-powered vehicles are generally cheap, which means their profitability is low. Their replacement cycle is also long, lasting for more than 10 years. The average selling price of a microcontroller unit (MCU), a vehicle semiconductor mounted on the brake and steering system to control automotive electronics parts, is much lower than that of mobile application processors (APs). This explains why Korean semiconductor makers did not actively invest in automotive semiconductors despite a prolonged supply shortage.

However, as demand for high value-added semiconductors has increased thanks to the rapid growth of EVs and autonomous vehicles, Korean companies are expanding their investment in this domain to actively respond to the change.

In particular, Samsung Electronics predicts that automotive semiconductors will grow into three major chips, along with those for servers and mobile devices, in 2030. Since 2020, the EV market is rapidly growing, and the amount of semiconductors installed in EVs is also rising sharply due to the advancement of electronic parts technology. One internal combustion engine-powered car has 100 to 200 parts, while an autonomous vehicle requires thousands of them. Samsung Electronics plans to respond to demand for high-performance automotive semiconductors by supplying next-generation memory solutions such as LPDDR5X and GDDR7 chips. Its goal is to claim the No. 1 position in the automotive memory market by 2025.