South Korea to foster parts suppliers for next generation cars

Seoul: South Korea’s top economic policymaker said the government plans to provide support to help around 1,000 auto parts makers transform into key suppliers of next-generation automobiles by 2030.

Finance Minister Hong Nam-ki said the country plans to create a 500-billion won ($448 million) fund to support research and development and facility investment in the next-generation vehicle sector.

“It is very necessary to take the lead in the next-generation vehicle and related parts markets,” Hong said at a government meeting on new industries.

Korean automakers are accelerating the development and production of next-generation automobiles, including autonomous and hydrogen-fueled vehicles.

But local auto parts makers have been struggling to cope with the changing trend due to lack of technology and manpower, reports Yonhap news agency.

South Korea plans to allocate 282.6 billion won this year to help auto parts firms transform their business portfolios to cover next-generation automobiles.

South Korea plans to have eco-friendly cars, including hydrogen fuel cell cars, take up 30 percent of the total automobiles registered in the country by 2030, rising sharply from the current estimate of 3 percent.

Outbound shipments of auto parts came to $18.6 billion in 2020, down 17.2 percent on-year amid the COVID-19 pandemic.

South Korea is a powerhouse of memory chips, led by Samsung Electronics, the world’s largest memory chip maker, and its smaller rival SK hynix Inc. But they have relatively lagged in developing non-memory chips, including system semiconductors.

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