Hyundai Motor to set up software R&D center in Silicon Valley

Hyundai Motor Group, the world’s third-largest carmaker, is set to establish a software research center in Silicon Valley as software is becoming more important than hardware for long-term competitiveness in the auto industry, the conglomerate’s sources said on Sunday.

The leading South Korean automaker with two car manufacturers, Hyundai Motor Co. and Kia Corp., aims to accelerate the development of software-defined vehicles (SDVs) through the center by attracting top engineers from US Big Tech companies in the Northern California region, a global high technology and innovation center, according to the sources.

The research center reportedly plans to focus on technology, which will be used in five to ten years, the sources said.

The project is led by Song Chang-hyeon, head of the group’s software center and advanced vehicle platform (AVP) business. Song, a former chief technology officer of the local tech giant Naver Corp., is also CEO of 42dot Inc. The group’s autonomous driving technology subsidiary, which established a unit in Mountain View, California, earlier this year, is already hiring software engineers there.

“Software is expected to become key on the battlefield of the future auto industry as cars are likely to evolve into moving smartphones,” said a Hyundai Motor Group official. “It is not an option but a must for Hyundai to establish a research center in Silicon Valley.”

SDV, KEY FOR FUTURE

The group believes its future depends on the success of SDVs, which are equipped with differentiated software such as smart operating systems (OSs), interesting infotainment systems and safe autonomous driving algorithms.

The competition in the world’s SDV sector is intensifying as global electric vehicle (EV) leaders such as BYD Co. and Tesla Inc., as well as tech behemoths, including Huawei Technologies Co., rush to develop software for the automobiles.

The global SDV market was forecast to grow 54.9% to $419.7 billion by 2028 from $270.9 billion last year, according to industry tracker MarketsandMarkets Research Pvt.

Hyundai Motor Group is one of just a few global automakers with their own OSs, along with Toyota Motor Corp. and Volkswagen AG. The South Korean carmaker, however, is considered to lag behind not only Tesla but also Chinese companies such as BYD and Xiaomi Inc. in infotainment systems and self-driving algorithms.

The group’s executives including Hyundai Motor CEO Chang Jae-hoon were reportedly shocked by the software technology of Chinese EV makers showcased at the Shanghai auto show in April, according to industry sources in Seoul.

TO CHANGE GROUP’S R&D WORKS

The planned Silicon Valley research center is expected to change the group’s research and development (R&D) work, industry sources said.

The auto conglomerate’s R&D organization currently consists of software, hardware and design units.

The hardware division handles the development of vehicles, hydrogen fuel cells and electrification technology, while the software department is led by the AVP unit.

Hyundai Motor Group is likely to adjust technology developed by the Silicon Valley center at the AVP unit and 42dot for actual use in final installation at the group’s Namyang R&D Center in South Korea, the heart of its global research network, industry sources said.

Write to Jae-Fu Kim, Jung-Eun Shin and Sang-Eun Lee at fu@hankyung.com
 
Jongwoo Cheon edited this article.