South Korea's automobile and semiconductor business groups on Wednesday said they will join forces in developing key automotive chips domestically, as the global supply shortages of key automotive chips are anticipated to disturb the production of cars.

The Korea Semiconductor Industry Association and the Korea Automobile Manufacturers Association inked a memorandum of understanding to roll out joint research projects and seek ways to produce automotive chips domestically.

South Korea is the world's leading exporter of memory chips, but 98 percent of its demand for automotive chips depends on overseas sources, making it one of the most vulnerable victims of a prolonged supply shortage.

Global automakers have been facing shortages of automotive chips recently, as the COVID-19 pandemic dealt a harsh blow to the global automobile industry last year, forcing them to cut production.

This, in turn, induced foundry firms to expand production of chips for mobile and IT devices.

Although global demand for cars rebounded as major economies gradually reopened business activities, the shortage of chips is expected to continue for the time being.

Last week, South Korea announced a blueprint to foster the automotive chip industry, planning to invest 75.7 billion won ($66.9 million) in related research and development projects this year, with the combined amount expected to reach 204.7 billion won over the 2020-2022 period. (Yonhap)