SK Hynix, the world’s second-largest memory chip maker, has unveiled a monumental investment plan, committing 103 trillion won ($74.6 billion) by 2028. This strategic move, announced by its parent company SK Group, aims to bolster its semiconductor business with a significant focus on artificial intelligence (AI).
The announcement comes as part of SK Group’s broader strategy to secure 80 trillion won by 2026. This fund will be dedicated to advancing AI, semiconductors, and enhancing shareholder returns, alongside a streamlined approach to managing its vast array of over 175 subsidiaries.
During a pivotal two-day strategy meeting, SK Group outlined its vision to rejuvenate the conglomerate. SK Hynix, the group’s primary profit engine, and its electric vehicle battery division have faced substantial losses recently. To combat this, the group is set to enhance its competitive edge by concentrating on its AI value chain. This includes high bandwidth memory (HBM) chips, AI data centers, and AI-driven services like personalized AI assistants.
“At a time of transition, a preemptive and fundamental change is necessary,” remarked SK Group Chairman Chey Tae-won. His statement underscores the urgency and significance of the group’s new direction.
The meeting also saw executives agreeing on a gradual reduction of subsidiaries to a more manageable number, though specific details on the scale of this reduction were not disclosed. Local media have speculated that SK Innovation, which controls the country’s largest oil refiner and the battery manufacturer SK On, may merge with the profitable gas affiliate SK E&S.
Financially, SK Group is optimistic about its future. It projects a profit before tax of approximately 22 trillion won this year, a remarkable turnaround from last year’s losses. By 2026, the group aims to achieve 40 trillion won in profit before tax.
South Korea, renowned for being home to the leading memory chip makers Samsung Electronics and SK Hynix, has faced challenges in keeping pace with global competitors in areas like chip design and contract manufacturing. In response, the South Korean government announced a 26 trillion won ($19 billion) support package earlier this year. This initiative is part of a national strategy to stay competitive in the fiercely contested global semiconductor market.
SK Hynix’s ambitious investment plan is poised to not only strengthen its market position but also to drive significant advancements in AI and semiconductor technology, marking a transformative period for the South Korean tech giant.