Korean Automakers Have Secured Motors, but Chips and LiDAR Are Still Holding Them Back
On the surface, auto industry numbers are read through unit sales. But look under the hood, and the real battleground has shifted entirely. Korea’s current competitive edge in autos stands out more clearly in electrification hardware like drive motors, inverters, and thermal management than in finished vehicle assembly. There’s a reason names like Hyundai Mobis, Hyundai Wia, LG Magna, and Hanon Systems keep coming up. On the other hand, lidar, power semiconductors, automotive MCUs/SoCs, and perception and decision-making software are still someone else’s game. That’s not just a minor disappointment. As the industry moves deeper into the EV and SDV era, it’s a weakness that hits cost, performance, and time-to-market all at once.
What’s interesting is that the No. 1 spot in Korea is still held by Hyundai Motor Group. But the face of the global No. 1 has changed. Toyota, Volkswagen, Tesla, BYD. That ranking doesn’t just reflect the rise and fall of brands. It shows that the contest is no longer about who builds cars best, but about who can integrate electrification architecture, software, and cost control into a working system. You can feel it too, right? Cars are no longer a game reserved for companies that simply know how to build great engines.
From steel sheets to apps, money leaks out in the middle of the chain and gets made at the top and bottom
The automotive value chain starts with raw materials and runs through Tier 2, Tier 1, OEMs, automotive electronics/EVs, the aftermarket, and mobility services—but profit is anything but evenly distributed. Raw materials are at the mercy of price swings, and Tier 2 suppliers are heavily dependent on their customers. Tier 1 suppliers, once designed in, tend to stick around for a long time. OEMs control volume and brand, but they also carry a heavy investment burden. And automotive electronics/EVs? That’s the hottest seat in the market right now. In today’s auto industry, the money is driven less by OEM unit sales than by core electrification components and integrated automotive electronics.
The aftermarket and mobility services also matter and shouldn’t be overlooked. That said, Korean companies’ current edge is still much clearer in hardware than in service platforms. That’s why names like Hyundai Mobis, Hyundai Wia, Hyundai Transys, LG Electronics (vehicle components), LG Magna, and Hanon Systems keep coming up. A business model that bundles electrification components into platform-level supply is far stickier than one that ends with selling a single vehicle. That’s why if you look only at automakers when analyzing the value chain, you keep missing the real core.
| Stage | Description | Subsegments |
|---|---|---|
| Raw materials | Basic raw materials for automobile manufacturing (steel, aluminum, plastics, rubber) | Steel/specialty steel, aluminum/lightweight materials, plastics/engineering plastics, rubber/tire materials, glass/displays |
| Tier 2 components | Tier 2 — subassemblies and forged, cast, pressed, and injection-molded parts | Pressing/sheet metal, forging/casting, injection molding/plastics, precision machining |
| Tier 1 components | Tier 1 — modules and core components supplied directly to automakers | Powertrain (engine/transmission), chassis/suspension, brakes, seats/interior, lighting/lamps, HVAC |
| Finished vehicles (OEM) | Vehicle manufacturing (global OEMs) | Korean OEMs, global ICE OEMs, EV-focused OEMs, Chinese OEMs, commercial vehicles |
| Automotive electronics/EV | Automotive electronic components and core EV components (batteries, motors, semiconductors, SDV) | EV batteries (cells/packs), drive motors/inverters, BMS/chargers, automotive semiconductors (SoC/MCU), ADAS sensors/cameras, SDV/vehicle software, etc. |
| Aftermarket | Aftermarket (maintenance, parts distribution, tires) | Maintenance/service, parts distribution, tires, auto finance |
| Mobility services | New mobility services such as car sharing, autonomous driving, and UAM | Car sharing/rental, autonomous driving services, UAM/urban air mobility, EV charging infrastructure, logistics/delivery |
What We’re Good At Is Metal and Power Conversion. What We’re Bad At Is Eyes and Brains.
Whenever localization comes up, people immediately think batteries. But in autos, the picture is a bit different. Korea has nearly caught up in drivetrain hardware, while it still faces a wide gap in vehicle sensing, computing, and decision-making. It’s a pretty cold-eyed reality. On the strong side, you can rattle off names like Hyundai Mobis, Hyundai Wia, LG Magna, LG Electronics (vehicle components), Hanon Systems, and Hyundai Transys. On the weak side, the technology names alone tell the story: LiDAR, power semiconductors, automotive MCU/SoC, perception and decision-making software, and automotive cameras and image sensors. In plain English, Korea has the muscles that make the car move, but its nervous system—the part that sees, calculates, and decides—is still weak.
On the strength side, the key technologies are drive motors, inverters, reducers and integrated drive units (e-Axles), thermal management systems, and electronic modules and ECUs. A gap of ≤1 is highly meaningful. That’s not just “catching up”—it means Korean players can compete head-on in orders and mass production. In particular, the areas where Hyundai Mobis, Hyundai Wia, LG Magna, LG Electronics (vehicle components), and Hanon Systems are active directly affect both EV cost and efficiency. That’s good. Really good.
The problem is the weak spots. In particular, a LiDAR gap of 4 and a gap of 3 in power semiconductors (SiC/IGBT), automotive MCU/SoC, and perception/decision-making software are not just missing pieces—they’re where control of the system itself slips away. If power semiconductors are weak, even a strong inverter business hits a ceiling in end-stage optimization. If MCU/SoC is weak, then no matter how many ECUs you bundle together, the core computing still depends on outsiders. And if perception and decision-making software is weak, then even with strong hardware bundling capabilities, you’re handing the highest-value layer to someone else. The gap of 2 in automotive cameras and image sensors is no small issue either. If the eyes are shaky, the entire autonomous driving stack gets shaky. The opportunity is clear too. If Korea packages its already-strong e-Axles, thermal management, and inverters together with electronic modules, the share Korean companies can capture gets bigger. But if chips and software remain empty spaces, the risk of being stuck as a high-quality hardware subcontractor rises just as fast.
Table below: Domestic vs. global TRL (Technology Readiness Level 1–9) by technology, and key companies
| Technology | Domestic | Global | Status | Key Companies | ||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Electrified Drivetrain | ||||||||||||||||||||||||||||||||
| Drive Motor | 8 | 8 | Strong · Gap 0 | Hyundai Mobis, Hyundai Wia, LG Magna | ||||||||||||||||||||||||||||
| This is the EV’s “electric engine,” the core component that actually turns the wheels and replaces the role of the combustion engine. The principle is simple: run current through coils, create a magnetic field, and that field pulls and pushes the permanent magnet rotor to generate rotational force via Lorentz force. The key is power density—how much torque and speed you can get from the same weight—so manufacturers boost efficiency with hairpin winding, which packs rectangular wires tightly to reduce empty space. As of 2025, Korea has internalized mass production of interior permanent magnet synchronous motors (IPMSM), and the next big thing to watch is R&D on wound-field and ferrite motors that reduce dependence on rare-earth magnets. | ||||||||||||||||||||||||||||||||
| Inverter (Power Conversion) | 7 | 8 | Strong · Gap 1 | Hyundai Mobis, LG Electronics (vehicle components), LG Magna | ||||||||||||||||||||||||||||
| This is the EV’s “transmission-cum-brain,” converting the battery’s direct current (DC) into the alternating current (AC) the motor uses. It works by switching power semiconductors such as IGBT or SiC on and off thousands to tens of thousands of times per second using PWM, creating an oscillating AC waveform from DC. That AC then forms a rotating magnetic field inside the motor to control acceleration. Replace conventional silicon (Si) with wide-bandgap SiC (silicon carbide), and electrical losses fall at high temperatures and voltages, extending driving range by 5–10% while reducing cooling burden. The biggest thing to watch in 2025–2026 is how quickly SiC inverters are becoming the standard for 800V high-voltage platforms. | ||||||||||||||||||||||||||||||||
| Reducer · Integrated Drive Unit (e-Axle) | 7 | 8 | Strong · Gap 1 | Hyundai Transys, Hyundai Wia, Hyundai Mobis | ||||||||||||||||||||||||||||
| Because a motor spins far too fast—well over 10,000 rpm—the reducer uses gears to lower rotational speed and multiply torque before sending it to the wheels. It works on the principle of gear ratio: lower speed, higher force. More recently, the standard trend has shifted to the e-Axle, a 3-in-1 integrated drive unit that combines the motor, inverter, and reducer into a single package, cutting wiring, housing, weight, cost, and space all at once. As of 2025, companies like Hyundai Transys are mass-producing integrated e-Axles, and the next things to watch are dual-motor drive systems and simplified high-speed gearing. | ||||||||||||||||||||||||||||||||
| Thermal Management System | 7 | 8 | Strong · Gap 1 | Hanon Systems, Hyundai Mobis | ||||||||||||||||||||||||||||
| Batteries, motors, and electronic components all lose performance and lifespan if they get too hot or too cold, so this is the system that keeps them in the optimal temperature range. The key technology, the heat pump, essentially runs the air conditioner in reverse: the refrigerant compresses and expands, absorbing outside heat and using it to warm the cabin. Compared with direct electric heating, it delivers 2–3x the heating effect with less electricity, greatly easing the winter range loss problem that used to cut driving distance by nearly 30%. More recently, the key trend to watch is integrated thermal management, which ties battery, motor, and cabin heat into a single loop and even recycles waste heat. | ||||||||||||||||||||||||||||||||
| Electronics · Automotive Semiconductors | ||||||||||||||||||||||||||||||||
| Power Semiconductors (SiC/IGBT) | 5 | 8 | Caution · Gap 3 | DB HiTek, Samsung Electronics, SK Siltron | ||||||||||||||||||||||||||||
| These are the “high-voltage switch” chips that turn hundreds of amps on and off quickly and with minimal loss inside an EV. Using SiC (silicon carbide), whose bandgap—the energy barrier electrons must cross—is about three times wider than conventional silicon, reduces leakage at high temperatures and voltages, cuts switching losses, and enables smaller, lighter designs. The result is higher inverter efficiency, longer range, and an advantage in 800V ultra-fast charging. The catch is that growing single-crystal SiC wafers is technically difficult in both materials and process terms, which is why European and U.S. players like Infineon and ST are ahead. As of 2025, Korea is still in catch-up mode, with SK Siltron on SiC wafers and DB HiTek on foundry services. | ||||||||||||||||||||||||||||||||
| Automotive MCU/SoC | 5 | 8 | Caution · Gap 3 | Telechips, Hyundai AutoEver | ||||||||||||||||||||||||||||
| These are the small “brain chips” that control each vehicle function—engine, brakes, infotainment, and more. Unlike the latest smartphones, what matters here is not the finest process node but reliability: the chip must keep running for more than a decade without fail, through vibration, humidity, and temperatures from -40°C to 125°C, meeting functional safety standards like ISO 26262. The old architecture used hundreds of chips per vehicle, but the trend is now shifting toward consolidating multiple functions into a single high-performance SoC. The 2021 automotive semiconductor shortage made their importance impossible to ignore. As of 2025, Telechips is mass-producing infotainment SoCs, but control MCUs remain dominated by overseas oligopolies like NXP and Renesas, making localization a key issue to watch. | ||||||||||||||||||||||||||||||||
| Electronic Modules · ECU | 8 | 8 | Strong · Gap 0 | Hyundai Mobis, LG Electronics (vehicle components), Samsung Electro-Mechanics, SL | ||||||||||||||||||||||||||||
| These are ECUs and modules that bundle sensors, semiconductors, and software to handle specific functions. Think of them as the vehicle’s nerves and muscles: sensors collect information, the ECU processes it, and then actuates motors, valves, or lighting. As autonomous driving and infotainment expand, electronics are taking up a much larger share of vehicle cost—rising quickly from around 20% in the internal combustion era to over 40% in EVs. Camera modules, headlamps (SL), and communication and display modules all fall into this category. In 2025–2026, the key trend to watch is the shift from scattered ECUs to a small number of high-performance integrated controllers under zonal architecture. | ||||||||||||||||||||||||||||||||
| Automotive Camera · Image Sensor | 6 | 8 | Catching Up · Gap 2 | Samsung Electro-Mechanics, LG Innotek | ||||||||||||||||||||||||||||
| These are the camera modules that serve as the car’s “eyes.” Light gathered through the lens hits the pixels of the image sensor, is converted into electrical signals proportional to light intensity, and then turned into digital images that identify lanes, signs, and pedestrians. As autonomous driving advances, more than 10 cameras per vehicle—front, rear, and surround—are becoming common. Dynamic range performance, especially the ability to see clearly at night or against strong backlight at tunnel exits, is directly tied to safety. Sony of Japan leads in automotive image sensors, while Korean players like Samsung Electro-Mechanics and LG Innotek compete in lenses, module assembly, and higher resolution. | ||||||||||||||||||||||||||||||||
| Autonomous Driving | ||||||||||||||||||||||||||||||||
| LiDAR | 4 | 8 | Weak · Gap 4 | Hyundai Mobis, SOS Lab, CARNAVICOM | ||||||||||||||||||||||||||||
| LiDAR is a “laser eye” that fires laser light in all directions and measures the time it takes to bounce back from objects (ToF, time of flight), creating a 3D point cloud of distance and shape. Because the speed of light is constant, you can calculate exact distance by multiplying round-trip time by light speed and dividing by two. Cameras are good at seeing color and shape but weak at estimating distance; LiDAR measures distance directly, which is why it is considered central to autonomous driving safety. In 2025–2026, the big thing to watch is the spread of solid-state designs with no rotating parts, driving prices down rapidly from tens of millions of won in the past to the hundreds of thousands to low millions of won range. In Korea, the chase is being led mainly by startups like SOS Lab. | ||||||||||||||||||||||||||||||||
| Radar | 6 | 8 | Catching Up · Gap 2 | HL Mando, Hyundai Mobis, bitsensing | ||||||||||||||||||||||||||||
| Radar is a sensor that emits radio waves (millimeter waves) and measures distance and speed from the reflected signals that bounce back from objects. Using the Doppler effect—the slight frequency shift in reflected waves from approaching or receding objects—it can instantly determine relative speed as well. Unlike cameras and LiDAR, which rely on light, radio waves penetrate fog, rain, snow, and dust well, making radar stable in bad weather and essential for AEB and smart cruise control. More recently, radar has evolved into 4D imaging radar that adds height information and dramatically improves resolution. Bosch and Continental still lead, but Korean players like HL Mando and bitsensing are building real mass-production competitiveness. | ||||||||||||||||||||||||||||||||
| Perception · Decision-Making SW | 5 | 8 | Caution · Gap 3 | Hyundai Mobis, 42dot, StradVision | ||||||||||||||||||||||||||||
| This is the brain software that uses AI to interpret information gathered by cameras, radar, and LiDAR—recognizing “that’s a pedestrian, that’s a car” (perception)—and then predicting movement to decide acceleration, braking, and steering (decision-making). Neural networks are trained on massive amounts of driving footage so the system can find patterns on its own instead of relying on hand-coded rules. That makes the scale and diversity of road data, along with the quality of AI algorithms, the real battleground—one reason U.S. players like Tesla and Waymo, with vast driving datasets, are ahead. In 2025–2026, the hot topic is end-to-end architectures that integrate perception and decision-making into a single neural network, while Hyundai Motor Group is pushing software internalization through its acquisition of 42dot. | ||||||||||||||||||||||||||||||||
| HD Map · Positioning | 6 | 7 | Strong · Gap 1 | Hyundai AutoEver, Naver Labs, Kakao Mobility | ||||||||||||||||||||||||||||
| This refers to ultra-precise HD maps that capture lanes, traffic lights, curbs, and signs down to roughly 10 cm, along with positioning technology that tells the vehicle exactly where it is on that map. GPS alone has errors of several meters, which makes lane-level positioning difficult. But by matching the surrounding terrain seen by sensors to the HD map, the system can determine even which lane the vehicle is in. For autonomous vehicles, this acts like a “look-ahead guide,” telling the car what lies ahead before sensors even see it. The key is an ecosystem that updates maps in real time as construction and lane changes occur frequently. In Korea, competitiveness is relatively solid thanks to collaboration among Hyundai AutoEver, Naver Labs, and other IT, OEM, and mapping players. | ||||||||||||||||||||||||||||||||
| Body · Lightweight Materials | ||||||||||||||||||||||||||||||||
| Advanced High-Strength Steel (AHSS) | 8 | 8 | Strong · Gap 0 | POSCO, Hyundai Steel | ||||||||||||||||||||||||||||
| This is thin but extremely strong automotive steel sheet. By adding trace alloys to steel and using heat treatment—heating and rapid cooling—manufacturers change the internal crystal structure to make it much stronger, delivering several times the strength of ordinary steel at the same thickness. That allows vehicles to be made thinner and lighter for better fuel economy and energy efficiency without sacrificing crash safety. POSCO’s Giga Steel is strong enough that a 1 mm² cross-section can withstand more than 100 kg of load, meaning tensile strength above 1 gigapascal. The key thing to watch is rising demand for lightweight high-strength steel in EVs, which must carry heavy batteries. Korean steelmakers are globally competitive here. | ||||||||||||||||||||||||||||||||
| Aluminum Lightweighting | 7 | 8 | Strong · Gap 1 | Hyundai Steel, Novelis Korea, Samyang Corporation | ||||||||||||||||||||||||||||
| This is the technology of reducing vehicle weight by using aluminum—whose density is about one-third that of steel—for body structures and components. Because aluminum is lighter, it is also weaker at the same volume, so strength has to be compensated through alloy design and forming processes. One especially important trend is giga-casting, where molten aluminum is injected under high pressure into a massive mold, turning what used to be dozens of welded rear-body parts into a single casting made in one shot. Tesla led this innovation, which cuts part count, weight, assembly steps, and welding robots all at once. The biggest thing to watch in 2025–2026 is how rapidly OEMs, including Hyundai Motor Group, expand adoption. | ||||||||||||||||||||||||||||||||
| Carbon Composite (CFRP) | 5 |
Why the crown moved from Toyota to Tesla, and now to BYDThe face of the No. 1 company in each era is far more honest than any industry textbook. From the 1990s to 2008, it was Toyota globally and Hyundai domestically. From 2009 to 2016, it was Volkswagen / Toyota globally and Hyundai / Kia at home. From 2017 to 2019, Tesla forced its way into a global field still led by Toyota / Volkswagen, while in Korea the picture consolidated under Hyundai Motor Group. From 2020 to 2024, the global leaders were Toyota / Tesla / BYD, and from 2025 to the present, the order has become BYD / Tesla / Toyota. In Korea, it is still Hyundai Motor Group.
The key to this transition is that the basis of dominance has shifted from the era of manufacturing efficiency to the era of electrification cost and software integration. What Toyota and Volkswagen symbolized was mass production, quality, and the ability to run platforms at scale. Tesla then shoved EV architecture and software speed into that equation. And BYD is even more blunt about it. It has locked down the electrification value chain in depth and simply driven costs lower. That is why the 2025~present order changing to BYD / Tesla / Toyota is not an accident. Korea’s position is not bad. But calling it overwhelming would be an exaggeration. The fact that Hyundai Motor Group continues to hold the No. 1 spot domestically is clearly a sign of strength. Still, the criteria for global dominance have already changed, and Korea’s strengths are concentrated in motors, inverters, e-Axles, thermal management, and ECUs, while its weaker areas remain lidar, SiC/IGBT, MCU/SoC, and perception and decision-making software. That is an advantage when chasing the leaders, but it also means Korea is still not quite in a position to design the board itself. We need to look at this coldly. Right now, Korea’s auto industry can build cars that run very well, but it still does not fully control the operating system of the game. The next battleground isn’t how many cars you sell, but who can bundle electrification bestWhat matters from here is actually pretty simple. Hyundai Mobis, Hyundai Wia, LG Magna, LG Electronics (vehicle components), Hyundai Transys, and Hanon Systems will determine the earnings resilience of Korea’s auto industry based on how effectively they bundle drive motors, inverters, e-Axles, thermal management, and ECUs. The era when being good at just one component was enough is ending. OEMs are far more likely to adopt integrated propulsion, thermal management, and electronic modules when they come as a package, and that also helps keep costs under control. The fact that Korea’s core strengths are technologically interconnected is clearly a major advantage. If that connectivity can be turned into actual products, it becomes a powerful edge. On the flip side, the risks are becoming even clearer. The lidar gap4, and the gap3 in power semiconductors (SiC/IGBT), automotive MCUs/SoCs, and perception/decision-making software, are not problems that time will simply solve. If those gaps are not closed, then even if Korea builds strong electrification hardware, control over the core systems and the high-margin profit pools will still flow elsewhere. The gap2 in automotive cameras and image sensors could also quietly widen over time. That’s why I’m not purely optimistic. The next phase for Korea’s auto industry depends less on finished vehicle sales volume and more on how quickly it can shore up its weak spots in chips and software. If it fails to do that, then regardless of Hyundai Motor Group’s strong performance, the standing of the broader industry could hit its ceiling sooner than many expect. ※ This analysis is based on public data and industry materials, and some figures and assessments are estimates. It should not be used as a direct basis for investment decisions. Written: June 2026. E. Aleksandro | ||||||||||||||||||||||||||||||
댓글
댓글 쓰기