66 Korean auto parts companies, automotive semiconductors
We are experiencing management difficulties due to supply instability.
Automotive semiconductor instability expected to peak in May or June


The Korea Automobile Manufacturers Association (KAIA) announced on the 10th that many domestic auto parts companies are experiencing management difficulties due to the global instability in the supply of automotive semiconductors.

According to an emergency survey conducted by KAIA on 78 parts suppliers that are first to third-tier suppliers of domestic automakers on the 3rd and 4th, 84.6% (66 companies) of the surveyed companies responded that they are experiencing management difficulties due to semiconductor supply and the resulting impact on the production capabilities of automakers.

Among the companies surveyed, 90.5% of those directly handling automotive semiconductors (21 companies) responded that they were experiencing management difficulties due to the recent unstable supply of automotive semiconductors.

Most semiconductor parts manufacturers are experiencing reduced production of automotive parts due to disruptions in the semiconductor supply chain. 38.1% of companies reported production declines of less than 10%, 33.3% experienced declines of 10-20%, 9.5% experienced declines of 20-30%, and 19.0% experienced declines of more than 30%.

It was revealed that the increase in the price of automotive semiconductors due to a shortage of quantity is also a problem that semiconductor parts manufacturers are facing. 50.0% of companies reported a price increase of less than 10%, while 33.3% reported a price increase of 10-20%. 16.7% reported a price increase of more than 20%.

35.0% of companies responded that their business conditions were "very serious," 35.0% "serious," and 30.0% "average." Of these companies, 38.1% were experiencing difficulties due to the delay between paying for semiconductor purchases and receiving payments from upstream suppliers. 23.9% of parts suppliers were experiencing difficulties securing funds due to the delay between paying for semiconductor purchases and receiving payments for deliveries, as payments are typically received within three months of delivery.

KAIA explained, “Due to the worsening shortage of automotive semiconductors, in order to smoothly purchase semiconductors, we must pay global semiconductor companies such as NXP, Renesas, and Infineon an expedited fee that is approximately 10% higher than the regular price to enable purchases.”

KAIA Chairman Jeong Man-ki said, “The supply and demand disruption of automotive semiconductors will reach its peak in May and June,” and suggested that the government prepare measures, saying, “In addition to government-level international cooperation efforts to secure automotive semiconductors, measures to overcome the liquidity problem are also necessary.”