"Choi Tae-won's Steadfastness Paid Off"... SK Group's Bold Move in 'Battery, Bio, Semiconductor' (Comprehensive)

SK Hynix, 10th Anniversary of Inclusion
Shedding the Label of Troubled Company... Responsible for 30% of Group Sales
Targeting Future Growth with Battery, Bio, and Semiconductor Businesses

[Asia Economy Reporters Jin-ho Kim and Sun-mi Park] On the 14th, SK Hynix will mark its 10th anniversary since joining the SK Group. The company, which carried the stigma of a struggling business with an operating loss of 227.3 billion KRW ten years ago, has now become a key profitable affiliate responsible for nearly 30% of the group's sales and a core growth engine for the future. This success highlights the decisiveness and bold investment of SK Group Chairman Chey Tae-won, who foresaw the growth potential of the semiconductor market and acquired a loss-making company. Chairman Chey plans to aggressively expand SK’s global footprint by further growing the semiconductor business centered on SK Hynix, as well as the battery and bio sectors.

◆ Chey Tae-won's bold move paid off = The industry’s assessment of SK Hynix’s transformation over the 10 years since joining the SK Group is one of remarkable progress. Last year, SK Hynix’s sales surpassed the semiconductor super boom period of 2018, reaching 43 trillion KRW. With the full effect of the Intel NAND business acquisition this year, sales could potentially reach up to 60 trillion KRW.

At the time of joining the group in 2012, the company recorded a loss of 227.3 billion KRW, but last year operating profit soared by 147.6% to 12.41 trillion KRW. The market capitalization, which was 16 trillion KRW at the time of acquisition, has now exceeded 90 trillion KRW and is approaching the 100 trillion KRW mark.

Chairman Chey played a major role in SK Hynix’s remarkable transformation. Although there was internal opposition within the group at the time of acquisition, citing it as an overly ambitious M&A, Chairman Chey pushed forward with the acquisition, anticipating semiconductor growth. Recognizing that growth required initial investment, he made bold investments in SK Hynix from the start. In 2012, he decided on a generous investment of 3.9 trillion KRW, and by 2017, facility investments exceeded 10 trillion KRW.

The leaders who spearheaded the acquisition continue to guide the company, bringing it to a stable growth phase. Vice Chairman Park Jung-ho and Presidents Lee Seok-hee and Noh Jong-won oversee overall business and investments, while Vice Chairman Park Sung-wook, who has dedicated over 30 years to memory semiconductors since the days of Hyundai Electronics Industry, the predecessor of Hynix in 1984, serves as a technology advisor reviewing future growth engines.

In 2017, SK Hynix made a 4 trillion KRW equity investment in Kioxia (formerly Toshiba Memory), a NAND specialist company, and in 2020, it signed a contract to acquire Intel’s NAND business for 10.3 trillion KRW, marking a further leap as a global leader in the memory sector. Shortly after the Chinese government approved the Intel NAND business acquisition, SK Hynix established its subsidiary Solidigm to strengthen independent management of the Intel NAND business. In San Jose, USA, SK has established Sapion, an AI semiconductor design company, and Gauss Labs, an AI solution development specialist, and is also investing 1.2 trillion KRW to build an R&D center to lead semiconductor research and development, among various other business initiatives.

◆ Future growth engines ‘BBC’ = Thanks to the strong performance of major affiliates including SK Hynix, SK Group is on the verge of surpassing its mid- to long-term goal of 200 trillion KRW in sales. In particular, the battery (B), bio (B), and semiconductor (C) sectors, collectively known as ‘BBC’, which Chairman Chey has focused on, have established themselves as the group’s core growth engines, raising expectations for the future. SK, which grew as a domestic company in refining and other sectors, is now recognized as a company firmly based in the global market.

SK is in a position to join the 200 trillion KRW sales club last year, following Samsung and Hyundai Motor. A major factor behind this growth was significant M&A successes, including the acquisition and successful turnaround of SK Hynix. SK Innovation and SK Telecom are also cited as successful M&A cases. SK Innovation recorded sales of 47 trillion KRW last year, a 36% increase from the previous year, making it one of the group’s profitable affiliates. Currently, the group has 21 listed affiliates.

SK is pursuing a new business strategy to expand its global presence by focusing on ‘BBC’ as its core growth engine. Of the 48 trillion KRW invested in the global market over five years since 2017, about 80%, or 38 trillion KRW, was invested in the ‘BBC’ sectors. Battery investments accounted for the largest share at 19 trillion KRW, followed by semiconductors (17 trillion KRW) and bio (2 trillion KRW).

SK Group’s large-scale concentrated investment in BBC reflects Chairman Chey’s strong will. To survive the increasingly fierce global business environment, Chairman Chey called for a ‘deep change’ in 2017. The business community views this directive as the turning point that transformed SK Group from a domestic industry player into a global market-based ‘BBC’ company.

Chairman Chey plans to contribute to enhancing national competitiveness through the group’s future growth engines, ‘BBC’. Over the past five years, SK Group has actively pursued the development of ‘BBC’ as the next-generation growth engine for South Korea.

This content was produced with the assistance of AI translation services.