South Korea's SK Hynix to invest $75 bln by 2028 in AI, chips

SK

30/06/2024 03:57

SEOUL, June 30 (Reuters) - South Korea's SK Hynix
 000660.KS , the world no.2 memory chip maker, will invest 103
trillion won ($74.6 billion) through 2028 to strengthen its
chips business, focusing on AI, its parent SK Group said on
Sunday. 
    SK Group also said it plans to secure 80 trillion won by
2026 to invest in artificial intelligence and semiconductors as
well as fund shareholder returns, while streamlining its more
than 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  096770.KS , 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  005930.KS  and SK Hynix, has fallen behind
some rivals in areas such as chip design and contract chip
manufacturing.
    Earlier this year, the government announced a 26 trillion
won ($19 billion) support package for its chip businesses,
citing a need to keep up in areas like chip design and contract
manufacturing amid 'all-out warfare' in the global semiconductor
market.
    

($1 = 1,380.7300 won)

 (Reporting by Hyunsu Yim; Editing by Sonali Paul)
 ((Hyunsu.Yim@thomsonreuters.com;))