South Korea's SK Hynix plans to invest $75 billion by 2028 in artificial intelligence and chip development
SK Group plans to enhance its competitiveness by concentrating on its AI value chain, which includes high bandwidth memory (HBM) chips, AI data centers, and AI services like personalized AI assistants.
SK Hynix, the second-largest chipmaker in South Korea, has announced its plan to invest $74.6 billion over the coming three years to advance memory chip technologies dedicated to artificial intelligence (AI). This significant investment follows a March pledge to allocate $90 billion toward a chip fabrication plant near Seoul, according to a news report by Reuters.
In addition to investing $75 billion in SK Hynix, SK Group plans to secure 80 trillion won ($57.8 billion) by 2026. This funding will be directed towards the development of AI and semiconductors, as well as shareholder returns, and will streamline the group's portfolio of more than 175 subsidiaries.
Following a two-day strategic meeting, the conglomerate has laid out plans to rejuvenate the group in the wake of considerable losses by SK Hynix and its electric vehicle battery division. The SK Group intends to boost its competitive edge by focusing on its AI value chain, encompassing high bandwidth memory chips, AI data centers, and personalized AI services.
The market for AI is fiercely competitive, with key players such as Google, Microsoft, and Nvidia at the forefront. The semiconductor market, vital for the advancement of AI, is even more contested and extends beyond the confines of Silicon Valley. An increase in the global demand for chips, essential for training AI systems, has resulted in a widespread shortage.
South Korea, home to the world’s top memory chip makers, including Samsung Electronics and SK Hynix, has lagged behind competitors in areas like chip design and contract chip manufacturing. To address this, the South Korean government announced a 26 trillion won ($19 billion) support package for its chip industry earlier this year. This initiative aims to keep pace with global competition in the semiconductor market, described as 'all-out warfare.'
The substantial investments by SK Hynix and SK Group reflect a strategic pivot towards AI and advanced semiconductor technologies, aiming to secure a competitive edge and ensure future growth in a rapidly evolving industry.
