SK Hynix, the world’s second-largest memory chip maker, has announced plans to invest a staggering $74.6 billion in artificial intelligence (AI) chips by 2028. The investment is part of a larger strategy by SK Group, SK Hynix’s parent company, to strengthen its chips business and focus on AI technologies. In addition to the investment in AI, SK Group plans to secure $56 billion by 2026 for further investments in AI and semiconductors, as well as fund shareholder returns. The conglomerate aims to streamline its 175 subsidiaries to improve competitiveness and navigate the changing technological landscape.
The decision to invest heavily in AI chips comes at a critical time for SK Group. Both SK Hynix and the group’s electric vehicle battery arm have suffered heavy losses, necessitating a revival strategy. By focusing on the AI value chain, which includes high bandwidth memory (HBM) chips, AI data centers, and personalized AI assistants, SK Group hopes to enhance its competitiveness and position itself as a key player in the AI market.
Chairman Chey Tae-won emphasizes the need for a “preemptive and fundamental change” during this time of transition. The investment in AI chips reflects an understanding of the growing importance of AI in various industries and the need to adapt to these changes. SK Group aims to maximize its potential in AI by developing advanced technologies and services that will revolutionize the way we interact with and benefit from AI.
The executives at SK Group also discussed plans to reduce the number of subsidiaries within the group to a more manageable level. Although the scale of the reduction was not specified, the move is aimed at streamlining operations and enhancing efficiency. Local media speculates that SK Innovation, which owns South Korea’s largest oil refiner and battery maker, may pursue a merger with profitable gas affiliate SK E&S.
SK Group’s ambitious goals include a projected profit before tax of approximately $18 billion for this year, with a target of $29 billion by 2026. These targets represent a significant turnaround from previous losses and indicate the group’s determination to succeed in the rapidly evolving semiconductor industry.
South Korea, known for being home to top memory chip makers such as Samsung Electronics and SK Hynix, has recognized the need to catch up in areas like chip design and contract chip manufacturing. In response to these challenges, the government has announced a $19 billion support package for the country’s chip businesses, aiming to keep pace with global competitors.
With SK Hynix’s $74.6 billion investment in AI chips, SK Group is making a bold move to drive the future of technology. By embracing AI and focusing on advanced chip technologies, the conglomerate aims to regain its competitive edge and position itself as a global leader in the semiconductor market. As the technology landscape continues to evolve, SK Group’s commitment to innovation and adaptation will be crucial in shaping the future of technology.
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