[News] SK Hynix to Invest USD 75 Billion in AI Push, with 80% of It Flooding into HBM

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On June 30, South Korea’s SK Group announced that its chip manufacturer, SK Hynix, will invest KRW 103 trillion (approximately USD 75 billion) by 2028 to enhance its chip business, with a particular focus on AI development.

According to a report from Commercial Times, SK Group recently concluded a two-day strategy meeting, after which it announced a full-scale effort to develop the AI capability, putting more emphasis on areas such as high-bandwidth memory (HBM), AI data centers, and AI voice assistants. SK Group further stated that 80% of the KRW 103 trillion, roughly KRW 82 trillion (USD 60 billion), will be dedicated to developing HBM.

HBM is widely used in generative AI chipsets, and SK Hynix is currently the exclusive supplier of HBM3 chips to NVIDIA. In the first quarter of this year, SK Hynix’s revenue more than doubled year-on-year to KRW 12.4 trillion, exceeding market expectations. Additionally, the company turned profit with an operating income of KRW 2.89 trillion, compared to a loss in the same period last year, primarily due to the high-margin HBM chips.

SK Group stated that by 2026, the group will invest KRW 80 trillion in AI and semiconductors, while continuing to streamline its businesses to increase profitability and return value to shareholders. Its plan to invest in AI chip development aligns with the South Korean government’s semiconductor policy.

As per a previous report from WeChat account DRAMeXchange, in January 2024, Korea launched the “World’s Largest and Best Semiconductor Supercluster Construction Plan,” proposing an investment of KRW 622 trillion (~USD 454 billion) by 2047, which is to build 16 new plants, inclusive of R&D facilities, and construct “Semiconductor Supercluster” in semiconductor-intensive cities such as Pyeongtaek, Hwaseong, Yongin, Icheon, and Suwon in southern Gyeonggi Province. It’s estimated that the chip production capacity will reach 7.7 million wafers per month by 2030.

According to another report from the Chosun Daily, starting from July, the South Korean government will also begin offering incentives and subsidies to semiconductor companies, launching a 26 trillion won (USD 19 billion) funding program to support the industry.

Read more

• [News] South Korea to Boost Semiconductor with a 26 Trillion Won Subsidy Program Starting in July
• [News] A Subsidy Wave Sweeping in the US, Europe and Japan amid the Cut-Throat Chip Competition

(Photo credit: SK Hynix)