SK Group to Make Largest-Ever Investment in AI and Semiconductors

On the 28th-29th at Icheon SKMS Research Center
Held Management Strategy Meeting to Decide Rebalancing Direction
Business Restructuring Focused on AI Semiconductors
Discussed Qualitative Growth of Battery and Bio Sectors

Chairman Chey Tae-won of SK Group and Chairman of the Korea Chamber of Commerce and Industry is delivering the keynote speech at the opening ceremony of the 56th Korea-Japan Business Conference held at the Okura Hotel in Tokyo on May 14. [Image source=Yonhap News]

SK Group is setting a rebalancing (business restructuring) direction centered on AI and semiconductors and discussing strategies for the largest investment in the group's history.

According to the business community on the 27th, SK Group will hold the '2024 Management Strategy Meeting' on the 28th and 29th at the SKMS Research Institute in Icheon, Gyeonggi Province, to focus on strategies such as investment in future growth businesses and 'qualitative growth' through solid management. SK Group Chairman Chey Tae-won will attend the meeting via video conference, along with SK Innovation Senior Vice Chairman Chey Jae-won, SK Supex Council Chairman Chey Chang-won, and about 30 CEOs from major affiliates including SK Inc., SK Innovation, SK Telecom, and SK Hynix.

SK Raises AI Semiconductor as Key Topic, Not 'Saving the Battery'

SK Group has designated AI and semiconductors as the top agenda for this meeting. The top executives plan to focus on concrete strategies and methods to secure maximum investment resources in growth sectors. SK Group is emerging as a powerful player in the global AI industry by leveraging its competitiveness in high-bandwidth memory (HBM), a high-performance memory product for AI. SK Group is fostering the entire ecosystem needed for AI, from semiconductors to services, including memory products optimized for AI systems and AI server construction such as HBM.

SK Telecom, which operates the generative AI service 'A.Dot,' is forming an 'Enterprise AIX Task Force (TF)' together with SK C&C. The goal is to strengthen synergy between AI and business-to-business (B2B) operations and to expand related businesses domestically and internationally. Additionally, the group is considering activating a 'B2B AI Council' under the ICT Committee of the SK Supex Council, the group's highest decision-making body. The ICT Committee Chairman is Yoo Young-sang, President of SK Telecom.

Chairman Chey Tae-won's recent trip to the United States is also aimed at strengthening 'AI cooperation.' Chairman Chey departed for the U.S. on the 22nd and is meeting with key figures from big tech companies to expand AI networks. Earlier this month on the 6th, he met Wei Zhejia, Chairman of the Board at Taiwan's TSMC, and in April, he met Jensen Huang, CEO of Nvidia, at the company's headquarters in San Jose.

An SK Group official explained the background of the discussion, saying, "With the rapidly approaching AI era, it is expected that the group will need to make the largest-ever investments over the next 2 to 3 years in business areas related to the AI ecosystem, such as HBM."

Battery and Bio Sectors to Improve 'Organizational Health' through Solid Management

To this end, SK CEOs plan to deeply discuss ways to secure resources through strengthening 'Operation Improvement' and portfolio readjustment, which have been underway at each company since the beginning of the year. Operation Improvement is a comprehensive management activity and strategy aimed at enhancing efficiency and maximizing profitability in existing businesses.

The CEOs will also discuss plans to achieve 'qualitative growth' through solid management such as Operation Improvement in promising future growth sectors like batteries and bio.

Previously, SK Group, which stepped in to save SK On from losses, is reportedly considering measures such as merging SK Innovation, the parent company of SK On, with SK E&S, merging SK On with SK Enmove, and selling shares of SK IE Technology (SKIET). Regarding this, SK Group explained that the Management Strategy Meeting is a forum to discuss the group's fundamental management principles and direction, and specific execution plans will be reviewed and decided by each company.

In particular, this meeting will focus intensively on discussions to practice and strengthen SK's unique management system, SKMS (SK Management System). SKMS was first established by the late founder Chey Jong-hyun in 1979 and has been repeatedly revised and advanced over the past 45 years to adapt to changes in the management environment, forming the foundation of SK's management.

SKMS has served as a focal point for overcoming difficult management environments such as the 1990s foreign exchange crisis and the 2000s global financial crisis. It also acted as a driving force behind major mergers and acquisitions (M&A) such as the 1980 acquisition of Yukong, the 1994 acquisition of Korea Mobile Telecommunications, and the 2012 acquisition of Hynix.

The CEOs plan to make SKMS agenda a continuous task this year and continue discussions at the Icheon Forum in August and the CEO Seminar in October. An SK Group official said, "This meeting will be an important milestone to derive strategies and methodologies for expanding investment capacity and achieving qualitative growth through solid management, which Chairman Chey Tae-won has emphasized."

Meanwhile, unlike previous years where presentations by key participants dominated, this year's meeting is expected to be conducted mostly in the form of in-depth discussions among CEOs until the rebalancing direction is finalized. Accordingly, Chairman Chey will also join via video from the U.S., listen to the discussions among CEOs, and deliver a concluding speech for about 1 to 2 hours at the end of the meeting.