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    Sunday, June 30, 2024

    South Korea's SK Hynix to Invest $75 billion by 2028 in AI, Chips

    SK Hynix, a South Korean multinational semiconductor company and the second-largest memory chip manufacturer globally, announced a substantial investment plan of 103 trillion won (approximately $74.6 billion) over the next six years, from 2023 to 2028.

    This strategic move aims to bolster its chip-making capabilities, with a specific focus on advancing artificial intelligence (AI) technologies. The investment plan was disclosed on Sunday by SK Group, the parent company of SK Hynix.

    SK Group announced its intention to secure 80 trillion won by 2026. This capital will be strategically invested in the fields of artificial intelligence and semiconductors, while also being utilized to provide shareholder returns. Additionally, the group plans to optimize its portfolio by streamlining its extensive network of over 175 subsidiaries.

    The sprawling conglomerate outlined the plans following a two-day strategy meeting, aiming to revive the group after SK Hynix, its main money maker, and the group’s electric vehicle battery arm suffered heavy losses.

    SK Group said it sought to improve its competitiveness by focusing on its AI value chain, including high bandwidth memory (HBM) chips, AI data centres and AI services such as personalised AI assistants.

    At a time of transition, a “preemptive and fundamental change is necessary,” SK Group Chairman Chey Tae-won was quoted as saying in the statement

    During the meeting, the executives also agreed to take gradual steps to adjust the number of subsidiaries in the group to a “manageable range”, without specifying the scale of the reduction.

    Local media had said SK Innovation, which owns the county’s largest oil refiner and battery maker SK On, was expected to pursue a merger with profitable gas affiliate SK E&S.

    The group expects Its profit before tax to reach around 22 trillion won this year, turning around from a loss last year, with the goal of hitting 40 trillion won in profit before tax by 2026.

    South Korea, home to the world’s top memory chip makers Samsung Electronics and SK Hynix, has fallen behind some rivals in areas such as chip design and contract chip manufacturing.

    In the realm of semiconductor technology, chip design and contract chip manufacturing hold significant importance.

    Earlier this year, the government unveiled a substantial support package worth 26 trillion won (approximately $19 billion) for its chip-related industries. This strategic investment underscores the imperative to maintain competitiveness in crucial areas such as chip design and contract manufacturing.


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