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SK Hynix to Invest $74.8 Billion in Semiconductor Sector by 2028
In a bold move signaling its commitment to the semiconductor sector, SK Hynix Inc., a key subsidiary of SK Group, unveiled plans to invest 103 trillion won, equivalent to $74.8 billion, through 2028. This announcement was made in a statement released on Sunday, with the company highlighting its focus on high-bandwidth memory (HBM) chips, which are essential for Nvidia Corp.’s artificial intelligence (AI) accelerators.
Focus on High-Bandwidth Memory Chips
About 80% of this significant investment, roughly 82 trillion won, will be dedicated to the HBM chips. This substantial commitment underscores SK Group’s strategy to leverage AI technological advances in its business operations. In addition, SK Telecom Co. and SK Broadband Co. will collectively channel 3.4 trillion won towards enhancing their data center infrastructure, further integrating AI capabilities.
Strategic Planning Amid Challenges
This investment plan follows an intensive annual strategy meeting convened by SK Group Chairman Chey Tae-won, which included about 20 top executives. The meeting lasted 20 hours over two days, centering on strategies to revamp the conglomerate. The discussion’s urgency was highlighted by Chey's current personal financial obligations, including a $1 billion divorce settlement.
Aiming for Financial and Operational Growth
The executives have outlined ambitious financial targets, aiming to generate 80 trillion won by 2026 from operations and business restructuring efforts. They also aim to secure 30 trillion won in free cash flow within three years to maintain a debt-to-equity ratio below 100%. Despite posting a loss of 10 trillion won last year, SK Group projects a significant rebound, forecasting a pretax profit of 22 trillion won this year and setting a goal to double that figure to 40 trillion won by 2026.
Expanding Domestic and International Investments
Though this is the first time SK Group has detailed its investment plans up to 2028, SK Hynix has been active in announcing various investments throughout the year. This includes a $3.87 billion investment in Indiana for an advanced packaging plant and AI products research center. Domestically, SK Hynix is also heavily investing, with $14.6 billion allocated for a new memory chip complex and ongoing contributions to the Yongin Semiconductor Cluster.
These investments reflect SK Group’s broader strategy to strengthen its position in key technological sectors, ensuring long-term sustainability and growth amid the rapidly evolving global tech landscape.
