SK Inno and E&S Approved Merger Plan on the 17th
AI Data Centers Consume Massive Electricity
"Electrification Solution for AI Data Centers"
Choi Tae-won, chairman of SK Group and the Korea Chamber of Commerce and Industry, explained the merger between SK Innovation and SK E&S by saying, "If the company can solve the energy issues involved in AI (Artificial Intelligence) data centers, there is significant potential and great synergy."
Choi Tae-won, Chairman of SK Group and the Korea Chamber of Commerce and Industry, is answering questions from the press at a press conference held on the occasion of the Jeju Forum on the 19th. Photo by Korea Chamber of Commerce and Industry
At a press conference held on the occasion of the Korea Chamber of Commerce and Industry’s Jeju Forum at the Shilla Hotel in Jeju on the 19th, Chairman Choi cited AI as the key reason that made him think it would be good to merge the two companies.
SK Innovation and SK E&S each held board meetings on the 17th and approved the merger plan. If the merger is completed, a mega energy company with sales of 88 trillion won and assets of 100 trillion won will be created.
Chairman Choi said, "AI consumes tremendous amounts of energy, and the two energy companies can join forces to create solutions." AI data centers, where demand is rapidly increasing due to market expansion, consume massive amounts of electricity. Chairman Choi explained the background of the merger by saying, "I thought it would become a significant business if we could develop solutions for the electricity used in AI data centers."
He added, "One side (SK Innovation) has batteries and related energy storage systems (ESS), while the other side (SK E&S) has hydrogen and power generation-related electricity businesses, so we expect to create many solutions."
SK On, a subsidiary of SK Innovation that operates the battery business, which is SK Group’s future growth engine, has recorded losses for 10 consecutive quarters. As a measure to revive SK On, which has fallen into a slump, SK Group has decided to merge SK On with SK Innovation’s valuable subsidiaries SK Trading International and SK Entum.
However, Chairman Choi expressed confidence in the growth of the battery market, which is currently experiencing a temporary demand stagnation known as the "chasm."
He said, "There is a possibility that the battery business may not progress as originally planned due to the chasm in the battery market. This does not mean we refuse to acknowledge that reality."
He added, "While we must acknowledge the reality, we cannot give up here. Looking to the future, we believe the growth potential of batteries will continue. Although the market is currently slowing down, we will continue to perform well, so it is important to keep things running smoothly until then."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
