South Korea’s SK Hynix plans a $74.6 billion investment to enhance its AI and semiconductor business by 2028, as SK Group aims to streamline operations and boost profitability.
Seol, Bollywood Fever: South Korea’s SK Hynix, the world’s second-largest memory chip maker, announced a substantial investment plan of 103 trillion won ($74.6 billion) through 2028 to fortify its chip business with a focus on artificial intelligence (AI), according to a statement by its parent company, SK Group, on Sunday.
Additionally, SK Group plans to secure 80 trillion won by 2026 for investments in AI, semiconductors, and shareholder returns while streamlining its extensive network of over 175 subsidiaries. The conglomerate revealed these strategic plans following a two-day strategy meeting aimed at revitalizing the group after significant losses in its main revenue-generating arm, SK Hynix, and its electric vehicle battery division.
SK Group aims to enhance its competitiveness by focusing on the AI value chain, including high bandwidth memory (HBM) chips, AI data centers, and AI services such as personalized AI assistants.
In a statement, SK Group Chairman Chey Tae-won emphasized the need for proactive and fundamental changes during this transitional period. “A preemptive and fundamental change is necessary,” Chey was quoted as saying.
The executives at the meeting agreed to gradually reduce the number of subsidiaries within the group to a more manageable range, although the scale of the reduction was not specified. Local media reports indicated that SK Innovation, which owns the country’s largest oil refiner and battery maker SK On, might pursue a merger with the profitable gas affiliate SK E&S.
SK Group anticipates a profit before tax of around 22 trillion won this year, marking a recovery from a loss last year, with a target of reaching 40 trillion won in profit before tax by 2026.
South Korea, home to leading memory chip makers Samsung Electronics and SK Hynix, has lagged behind some competitors in areas such as chip design and contract chip manufacturing. Earlier this year, the South Korean government announced a 26 trillion won ($19 billion) support package for its chip businesses, highlighting the urgency to catch up in the global semiconductor market amid fierce competition.
This strategic investment by SK Hynix and SK Group reflects a robust commitment to staying competitive in the rapidly evolving AI and semiconductor industries, positioning themselves for future growth and innovation.
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