Wolterk
SK Hynix plans to invest 103T won (about $74.8B) through 2028 to bolster its chips business, Bloomberg News reported citing the South Korean company’s parent SK Group.
Around 80%, or 82T won, will be set aside to invest in high-bandwidth memory, or HBM chips, SK Group said in a statement on Sunday, the report added.
SK Hynix’s HBM chips are optimized for use with Nvidia’s AI accelerators. The market for HBM is led by South Korean companies SK Hynix and Samsung (OTCPK:SSNLF), and to a lesser extent by American chipmaker Micron (MU). SK Hynix and Samsung help make South Korea the world’s largest producer of memory chips.
As part of its AI plans, SK Telecom and SK Broadband will invest 3.4T won on their data center business, according to the report.
The plan following SK Group Chairman Chey Tae-won and other top executives held annual strategy meetings to discuss the direction the company, which is the second-largest group after Samsung, is heading. The discussions included ways to reorganize the group, which has businesses such as energy, chemicals and batteries, the report noted.
The company’s executives noted that the group will aim to generate 80T won by 2026 from operations and business overhaul. The objectives also includes securing 30T won in free cash flow in three years to keep its debt-to-equity ratio below 100%.
SK Hynix had lost 10T won last year, but this year it anticipates to report a pretax profit of 22T won. The company intends to increase this to 40T won in 2026, the report added.
The company has disclosed the investment plans through 2028, for the first time, but in the past few months, it had had made other investment announcements as well.
In April, SK Hynix said it would invest around 5.3T won ($3.86B) to build a M15X fab in Cheongju, in North Chungcheong Province, in South Korea. The company plans to expand the production capacity of the next-generation dynamic random access memory, or DRAM, chip, including HBM. In March, it was reported that the company intends to invest about $4B to set up an advanced chip-packaging facility in West Lafayette, Indiana.
SK Hynix said in May that its HBM chips used for AI chipsets were sold out for this year and almost fully booked for the next year.
The U.S., China, the EU, South Korea and Japan are among countries and regions which have stepped up efforts to boost domestic chip manufacturing to stay ahead in the AI race. South Korea plans to start granting aid to chip makers from its 26T won (about $19B) package from this to boost domestic semiconductor manufacturing.