South Korea’s 2nd largest chipmaker to invest $75B in AI through 2028

SK Hynix, the second largest chipmaker in South Korea behind Samsung, will invest $74.6 billion over the next three years to develop memory chip technologies focused on artificial intelligence (AI). 

Parent company SK Group will also seek to secure an additional $57.8 billion to further fund its AI endeavors by 2026, according to a report from Reuters.

Artificial intelligence

Per the report, SK Group has “suffered heavy losses” as of late through both Hyinx and its vehicle battery subsidiary. The outsized investments, if the second is secured, will total nearly $133 billion — according to Companies Market Cap, Sk Hyinx alone only has a market capitalization of about $118 billion as of the time of this article’s publication.

SK Group evidently sees the expenditures and the heightened focus on developing artificial intelligence technologies as a path towards recouping the reported losses and shoring up the fiscal future for the company.

The pivot towards AI will also enable the group to streamline its operations. SK Group is expected to winnow its subsidiaries down from its current count of “more than 175” to something more in line with the group’s current targets and ambition.

Competition

The world of artificial intelligence is highly competitive at the enterprise level with big tech outlets such as Google, Microsoft, and Nvidia conducting the lion’s share of business. But the semiconductor market is somewhat more competitive.

While Microsoft, Nvidia, and Apple continue to jockey for position as the world’s most valuable company, the chipmaker market extends well beyond Silicon Valley.

As more technology companies enter the AI arena, and big tech continues to push the envelope, the demand for chips (specifically those capable of training AI systems) has skyrocketed and led to a global shortage.

SK Group reportedly believes that its current investment strategy will raise its profits from a projected $16 billion in 2024 to nearly $30 billion by the end of 2025.

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