Bloomberg Interview
Chairman Choi: "Cannot Rely 100% on China"
"Mystery" Over Huawei Phones Using SK Semiconductors
Diagnosis of Memory Semiconductor Oversupply
"SK Group Succession Plan Exists but Too Early to Disclose"
Choi Tae-won, chairman of SK Group, stated that he is working to reduce dependence on China amid escalating US-China geopolitical tensions, which has caused electric vehicle battery prices to remain high for an extended period. Regarding the inclusion of SK Hynix semiconductors, which have been banned from export to China, in the latest Huawei smartphone, he described it as a "mystery." He also revealed that SK Group has begun preparing a succession plan.
According to Bloomberg on the 11th, Chairman Choi said in a recent interview with the outlet, "If schedules had not been changed due to geopolitical and supply chain issues, we could have significantly lowered costs on the battery side."
Earlier, the Biden administration in the US implemented the Inflation Reduction Act (IRA) from August last year, which includes measures to reduce dependence on Chinese batteries. China dominates the global battery market from minerals and materials to manufacturing, but the US requires companies to reduce mineral dependence on China to qualify for IRA subsidies. This has led to an increase in battery manufacturing costs, which account for 40% of the price of electric vehicles.
Chairman Choi emphasized, "We cannot rely 100% on China for key materials," adding, "Everyone is actually looking for ways to build a secure supply chain." He further noted, "SK battery companies recently visited Africa and South America to explore options for sourcing materials from places other than China."
Regarding the recent US government decision to effectively indefinitely postpone equipment import restrictions on Samsung Electronics and SK Hynix's semiconductor factories in China, he welcomed the move, saying, "It is very good news, and I am pleased." He added, "We produce memory semiconductors, which are a type of commodity, and commodities themselves should not be subject to strict regulations."
Chairman Choi also referred to the advanced SK Hynix semiconductors included in Huawei's 'Mate60 Pro' smartphone, unveiled last August, despite the ban on exports to China, calling it a "mystery." SK Hynix explained that since Huawei became subject to US sanctions, they have not conducted transactions with the company.
He stated, "If we had our own distribution channels, we would no longer use those channels due to US sanctions," adding, "It was not our channel that distributed [the semiconductors]."
Regarding the current semiconductor market situation, he assessed, "It is not good," diagnosing that "an oversupply is occurring, especially in the memory sector."
Chairman Choi also spoke about SK Group's succession plan.
He said, "I am thinking about and preparing for that issue. If I have an accident, who will lead our group? A succession plan is necessary." He added, "I have my own plan, but it is not yet at a stage to be disclosed."
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