SK Hynix, a member of chaebol giant SK Group, the second largest chipmaker in South Korea after Samsung, will invest $74.6 billion over the next three years to develop memory chip technologies focusing on artificial intelligence (AI).
Parent company SK Group will also seek to raise an additional $57.8 billion to further fund its AI efforts by 2026, according to a report from Reuters.
AI and chips are the way to help the company lose money?
SK Group has reportedly “suffered heavy losses” recently through both Hyinx and its electric vehicle battery subsidiary. The massive investments, if raised, would total nearly $133 billion, with SK Hynix alone having a market capitalization of around $118 billion as of this writing.
It’s clear SK Group sees spending and a heightened focus on developing artificial intelligence technologies as a path to recovering reported losses and bolstering the company’s financial future.
The shift to AI will also allow the group to streamline its operations. SK Group plans to reduce the number of subsidiaries from the current “over 175” to a level that is more in line with the group’s current goals and ambitions.
Fierce competition
The world of enterprise AI is very competitive, with big tech companies like Google, Microsoft, and Nvidia taking the lion’s share of the revenue. But the semiconductor market is much more competitive.
While Microsoft, Nvidia and Apple continue to vie for the position of the world’s most valuable company, the chip manufacturing market expands far beyond Silicon Valley.
As more tech companies enter the AI space and major tech companies continue to push the envelope, demand for chips (especially those capable of training AI systems) has skyrocketed and leading to a global shortage.
SK Group reportedly believes its current investment strategy will boost profits from an expected $16 billion in 2024 to nearly $30 billion by the end of 2025.
Stone Sanh
According to Cointelegraph
