SK Secures 80 Trillion Won by 2026... Expanding AI and Semiconductor Investments (Comprehensive)

Management Strategy Meeting Held on 28-29
Choi Tae-won "Strengthening AI Value Chain Leadership"
82 Trillion Investment in AI Fields Including HBM

Choi Tae-won, Chairman of SK Group, emphasized the need to strengthen 'AI value chain leadership' from AI (artificial intelligence) services to infrastructure. He called for proactive and fundamental changes to prepare for the future in the new era of transformation.

On the 30th, SK Group announced that Chairman Choi said at the management strategy meeting held on the 28th and 29th at the SKMS Research Institute in Icheon, Gyeonggi Province, "In the United States right now, the wind of change related to AI is so strong that there is nothing to talk about except 'AI'."

Chairman Chey Tae-won of SK (via video) is delivering the opening speech at the management strategy meeting held on the 28th-29th at the SKMS Research Institute in Icheon, Gyeonggi Province. (Provided by SK Group)

Chairman Choi also predicted that SK's strong 'energy solutions' sector could secure growth opportunities in the global market comparable to AI. He added, "The green, chemical, and bio business sectors should pursue 'qualitative growth' through selection and concentration and sound management by carefully examining market changes and technological competitiveness."

The management strategy meeting was held with about 20 CEOs of major affiliates, including Chairman Choi and Senior Vice Chairman Choi Jae-won attending via video conference, as well as Choi Chang-won, Chairman of the SUPEX Council. SK's top management shared the results of various task force activities conducted to reorganize the value chain and held follow-up discussions. Each company plans to promote specific execution plans at their respective boards of directors starting in the second half of this year in line with the agreed direction.

First, SK will proactively prepare for the upcoming big wave in the market and secure future growth opportunities by fundamentally transforming its value chain. Based on the SKMS (SK Management System) spirit, which is the foundation of SK management, the company decided to strengthen the fundamentals of management, such as 'operational improvement.'

Chairman Choi Chang-won said, "We have clear goals such as 'qualitative growth,' and if we continue to work steadily, there is nothing we cannot achieve," adding, "We must accelerate 'operational improvements' underway in each company to repay the market with expectations and trust." In particular, Chairman Choi emphasized the importance of strictly adhering to basics and principles such as compliance during the business restructuring process and the need for active and sincere communication with stakeholders.

At this meeting, SK management agreed to secure 80 trillion KRW by 2026 through profitability improvement, business structure optimization, and synergy enhancement, to be used for investments in future growth areas such as AI and semiconductors and for shareholder returns. They also set a goal to generate 30 trillion KRW in free cash flow (FCF) within three years through operational improvements and manage the debt ratio below 100%.

They also announced that the pre-tax loss of 10 trillion KRW recorded last year is expected to turn into a profit this year, reaching around 22 trillion KRW, and set the pre-tax profit target for 2026 at the 40 trillion KRW level.

Through investments in AI and semiconductors, SK Group plans to further refine the AI value chain, including AI semiconductors led by high-bandwidth memory (HBM), AI data centers, and AI services such as personal AI assistants (PAA), securing global-level competitiveness.

Accordingly, SK Hynix will invest a total of 103 trillion KRW over the next five years until 2028 to strengthen its semiconductor business competitiveness. Approximately 82 trillion KRW (80%) will be invested in AI-related business areas such as HBM. SK Telecom and SK Broadband will invest 3.4 trillion KRW over five years in the AI data center business.

Additionally, the CEOs decided to establish a 'Semiconductor Committee' within the SUPEX Council as of July 1 to strengthen synergy among affiliates related to the AI and semiconductor value chains, appointing Kwak No-jung, President of SK Hynix, as chairman.

The CEOs also agreed on the need to adjust the total number of affiliates to a 'manageable range' during the process of eliminating overlapping investments and decided to proceed step-by-step through internal procedures of each company. The plan is to internalize high-quality assets and maximize synergy among future growth businesses to achieve a twofold effect.

Chairman Chey Tae-won of SK (via video) is delivering the opening speech at the management strategy meeting held on the 28th-29th at the SKMS Research Institute in Icheon, Gyeonggi Province. (Provided by SK Group)

Furthermore, the management recognized that it is an important time to restore and practice the SKMS and SUPEX (Super Excellent) pursuit spirit. 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 management.

The CEOs pledged, "To overcome the challenging management environment and proactively respond to the future, all members of the group must unite with the spirit of 'returning to basics,' and the top management should demonstrate leadership by example with humility and the spirit of 'VWBE (Voluntary and Willful Brain Engagement),' one of the core elements of SKMS."

To this end, after the management strategy meeting, SKMS will be set as a discussion agenda and key task in major management meetings, including the Icheon Forum in August and the CEO seminar in October, to share and strengthen practical activities by each company.

Meanwhile, SK Group will continue to seek and enhance efficient working methods for employees. Flexible work systems, Happy Friday, and telecommuting, introduced to create a voluntary and motivated work environment, will continue to be implemented according to each company's circumstances.

An SK Group official said, "The starting point and conclusion of this meeting is to sufficiently secure the foundation for growth in preparation for the upcoming big opportunity," adding, "Future-oriented investment activities are expected to have a positive impact on the national economy through economic revitalization as well as enhancing SK's corporate value."