South Korea’s 2nd largest chip maker to invest $75 billion by 2028
SK Hynix, South Korea's second-largest chipmaker after 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 is looking to raise an additional $57.8 billion by 2026 to further fund its AI efforts, according to a Reuters report.
Artificial intelligence
According to the report, SK Group “suffered heavy losses” through both Hynx and its vehicle battery branch. Value-weighted investments, if the latter is maintained, would total nearly $133 billion – according to companies' market caps, Sk Hyinx alone has a market capitalization of only about $118 billion as of this writing.
SK Group sees the spending and its focus on developing artificial intelligence technologies as a way to offset the reported losses and boost the company's future financial position.
The pivot to AI allows the team to streamline its operations. SK Group is expected to outsource the subsidiary from its current headcount of “over 175” in line with the group's current target and ambition.
Competition
The world of artificial intelligence is fiercely competitive at the enterprise level, with big tech giants like Google, Microsoft and Nvidia commanding the lion's share of the business. But the semiconductor market is somewhat more competitive.
While Microsoft, Nvidia and Apple continue to jockey for title as the world's most valuable company, the chipmaker's market extends beyond Silicon Valley.
As more tech companies get into AI platforms, and big tech continues to push the envelope, demand for chips (especially those capable of training AI systems) is soaring, leading to global shortages.
SK Group is said to believe that its current investment strategy will increase its profits to $30 billion by the end of 2025 from a target of $16 billion in 2024.
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