Hyundai Motor Group is in talks with South Korean chipmakers companies to help it reduce dependency on foreign supplies amid a global shortage that has stopped assembly lines at automakers around the world. Hyundai officials have reached local firms which design chips but redistribute manufacturing to the likes of TSMC and Samsung Electronics Co Ltd as it explores long-term strategies to better diversify its supply chain, said two people at local firms who met with Hyundai.

The Hyundai Motor Group wants to shift some of its auto chip orders such as microcontroller units (MCUs) to South Korean designers, but technology there still lags industry leaders such as Dutch automotive chip supplier NXP Semiconductors and Japan’s Renesas Electronics Corp, according to the people.

“On top of facing high entry barriers to the auto chip market, long and strict qualification processes make it more difficult for smaller chip companies to design auto chips it would take four to five years to supply auto chips, while it could take less than one year for designing and producing chips for home appliances,” a person at a South Korean fabless company said.

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“The company is pursuing plans to “localize” auto chips in a bid to diversify supply chains in South Korea after experiencing chip sourcing issues, mostly caused by suppliers being outside of the country,” said a person at Kia.