SK boosts chip lead with $56b AI push

South Korea’s SK Group is making a major push into artificial intelligence (AI) and semiconductors, aiming to raise 80 trillion won ($56 billion) by 2026 for strategic investments.

The decision comes after a two-day meeting where SK executives agreed to use funds from improved profitability, business structure optimisation, and synergy creation.

These funds will be directed towards high-bandwidth memory (HBM) chips, data centres, and personalised AI assistant services, all aimed at strengthening the company’s AI supply chains.

This move capitalises on SK Hynix’s existing strength in the AI sector. The company pioneered HBM chips a decade ago and is expected to dominate the market this year with over 50 per cent share.

SK Hynix’s stock price reflects this success, surging 65 per cent in 2024 compared to Samsung Electronics’ modest four per cent rise.

However, Samsung, the world’s top memory chipmaker, is also entering the HBM market and becoming a verified Nvidia supplier. Additionally, Micron from the US is vying for a larger share, creating a potential three-way battle for market dominance.

Analysts believe SK Hynix still holds the edge in chip-stacking technology, a key factor in enhancing speed and data processing capabilities. This advantage is crucial as Nvidia’s GPUs currently dominate the AI server market.

SK Group aims to reach an 80-trillion-won goal through mergers and asset sales to streamline its business portfolio. The conglomerate is shifting focus from its struggling battery business to AI and semiconductors for future growth.

Attribution: The Nikkei Asia