GERMAN chipmaker Infineon said today it had signed an agreement to supply semiconductors to South Korean carmakers Kia and Hyundai until 2030, as part of efforts to diversify supply chains following a global shortage.  

Infineon “will build and reserve manufacturing capacity” to deliver silicon carbide and silicon power semiconductors to the companies, it said in a statement.   

The Hyundai-Kia group will in turn support Infineon “with financial contributions”.  

Carmakers worldwide have in recent years been impacted by a shortage in semiconductor chips, fuelled by a pandemic-induced surge in demand for home electronics and supply chain disruptions.  

Automakers have at times been forced to trim production because of the lack of semiconductors, critical components in both conventional and electric vehicles (EVs).  

“This partnership not only empowers Hyundai Motor and Kia to stabilise its semiconductor supply but also positions us to solidify our leadership in the global EV market,” said Heung Soo Kim, Hyundai’s executive vice president.  

The supply woes have eased in recent months, but the squeeze has prompted a push to reduce reliance on Asia, where most chips are manufactured, and ramp up production in Europe and the United States.  

Infineon, one of Europe’s leading chipmakers, last year unveiled plans for a €5 billion (RM25.05 billion) new factory in the eastern German city of Dresden, slated to open in 2026. – AFP, October 18, 2023.