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South Korea's SK Hynix company, the second largest memory chip maker in the world, has announced plans to invest 103 trillion won ($74.6 billion) by 2028 to enhance its chip business, with a focus on AI, according to its parent company SK Group.
The conglomerate also revealed intentions to secure 80 trillion won by 2026 for investments in artificial intelligence, semiconductors, and shareholder returns, while also streamlining its more than 175 subsidiaries.
These plans were outlined following a strategic meeting aimed at revitalizing the group after heavy losses incurred by SK Hynix and the group's electric vehicle battery arm.
SK Group aims to improve its competitiveness by concentrating on its AI value chain, including high bandwidth memory (HBM) chips, AI data centres, and personalized AI services.
Chairman Chey Tae-won emphasized the need for a "preemptive and fundamental change" during the transitional period.
The executives also agreed to gradually adjust the number of subsidiaries in the group to a "manageable range," without specifying the scale of the reduction.
Reports suggested that SK Innovation, which owns the country's largest oil refinery and battery maker SK On, might pursue a merger with profitable gas affiliate SK E&S.
The group anticipates a turnaround in its profit before tax this year, expecting it to reach around 22 trillion won, with a goal of hitting 40 trillion won in profit before tax by 2026.
South Korea, known for housing leading memory chip makers like Samsung Electronics and SK Hynix, has faced challenges in areas such as chip design and contract chip manufacturing compared to some competitors.
Earlier this year, the government announced a 26 trillion won ($19 billion) support package for its chip businesses, citing the need to keep up in areas like chip design and contract manufacturing amid fierce competition in the global semiconductor market.
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