Busan and VCTech, Leader in Vehicle Control Technology, Enter into Reshoring MOU
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Busan and VCTech, Leader in Vehicle Control Technology, Enter into Reshoring MOU
□ Busan Metropolitan City has signed a memorandum of understanding for reshoring valued at 26.8 billion won with VCTech*, a leading manufacturer of train and electric car control technology. The agreement was finalized in the City Hall Video Conference Room, at 10:50 on December 18th, 2024.
○ Mayor Park Heong-joon, VCTech CEO Lee In-seok, and Hyoseong Electric CEO Jeong Jin-geun attended the signing ceremony.
<VCTech>
A specialist in parts for rolling stock and electric vehicles
Rolling stock parts (Flagship products): traction inverter controllers, train control and monitoring systems
Electric vehicle parts (Sub products): EV inverters, blower motor controllers
□ Headquartered in Gunpo, Gyeonggi-do, and established in 2002, VCTech is a technology-intensive SME specializing in mobility control. Starting with the supply of traction inverter controllers for Daegu Metro Line 2, it was the first in the world to mass-produce golf cart AC motors and inverters.
○ Busan Transportation Corporation and Seoul Transportation Corporation are also major clients. VCTech exports rolling stock components to Canada, Australia, Egypt, and several other countries as a subcontractor of Hyundai Rotem.
○ With a research-oriented workforce that makes up more than half of employees, VCTech holds 35 patents at home and abroad. The company focuses on motors and drive systems for electric vehicles, shaping the future of mobility.
□ VCTech is a proud partner of Hyoseong Electric*, which moved back to Korea in 2023. With VCTech relocating to Busan, both will collaborate on technological convergence.
<Hyoseong Electric>
A top manufacturer of materials and parts based in Busan with over 40 years of history Flagship product: blower motors (selling more than 18 million units every year, taking the world’s second spot)
□ Under the MOU, VCTech will shift manufacturing out of Shanghai, China, to the Southeastern Region Radiologic & Medical Sciences Industrial Complex in Gijang-gun, where Hyoseong Electric is located. With the move at least 37 jobs are projected to be newly created.
○ In Busan, VCTech's control technology will complement Hyoseong's expertise in motor technology, leading to synergies and strengthened competitiveness in the growing sustainable mobility sector.
○ With a 26.8 billion won investment, VCTech will build a mass production plant for rolling stock and electric vehicle traction inverter controllers and blower motor controllers. By 2026, when fully operational, the annual production capacity is expected to reach 300 billion won.
□ VCTech’s investment will contribute to forging a next-generation power semiconductor ecosystem and integrating related industries. As such, the designation of the 'Secondary Battery & Mobility Opportunity Development Zone,' currently underway, is seen as essential.
○ In July 2023, to capture the domestic market for power semiconductors, which are highly dependent on foreign suppliers, the city of Busan designated the Southeastern Region Radiologic & Medical Sciences Industrial Complex as the Power Semiconductor Specialized Complex. The city also requested the additional designation of the Secondary Battery & Mobility Opportunity Development Zone as an initiative of the 'Southeastern Region Value Chain,' a network of interconnected processes from raw material supply to finished automobile transportation vehicles.
○ Opportunity Development Zones will not only facilitate balanced regional development but also bring innovation and prosperity to the city.
□ Mayor Park Heong-joon said, “The future of mobility is being driven by electrification, and the key to electrification lies in securing control technology. The return of VCTech to Korea will make Korean manufacturing more globally competitive and stimulate the local economy. We will gladly serve as a stepping stone for VCTech to becoming a global pioneer.”
□ He added, “We are dedicated to attracting further investments in cutting-edge technologies in 2025. Our goal is to firmly position Busan as a global hub for mobility, a pillar of the city’s manufacturing field.”
