SEOUL -- Hyundai Motor Co. has so far avoided a chip shortage that has plagued global automakers, largely maintaining its stockpile of chips last year and even accelerating purchases towards the end, three people with knowledge of the matter told Reuters.
The shortage has forced production cuts worldwide, including at Volkswagen Group and General Motors, prompting Germany and the U.S. to ramp up efforts to resolve the shortage.
Other than Japan's Toyota Motor Corp., which said this month it had enough chip inventory to last it about four months, Hyundai and its sister firm Kia Corp. are the only global automakers to have maintained a stockpile of low-tech chips that helped them keep up production.
If it doesn't ease soon, though, the shortage could hit Hyundai too, as tight capacity on factory floors starts pressuring production of even high-tech auto chips, said two of the people, who are familiar with the company's purchases.
The South Korean automaker kept buying chips even as rivals cut orders to reflect diminished demand because of the pandemic.
Analysts said past events that roiled Hyundai's supply chain and forced it to halt production have shaped this more conservative take on inventory, a departure from automakers' typical just-in-time approach.
"Like other automakers, Hyundai also planned to cut production at the beginning of the year because of Covid-19," said one of the people with direct knowledge of Hyundai's purchases.
"But procurement read the trend of the semiconductor industry cutting auto chips production and said, 'if we don't buy them as well, we'll be in trouble later on,'" said the person, referring to a rush of buying by gadget makers that sucked up most chipmaking capacity.
Chipmakers who supply auto companies outsource most of their production to contract manufacturers like Taiwan's TSMC, which analysts say often prioritize orders from electronics clients who account for nearly all their revenue.