AI Hardware

SK Hynix announces $75B investment to boost AI chipmaking business

SK Group, the parent of South Korean memory chipmaker SK Hynix Inc., plans to invest $74.6 billion into its chip business over the next three years, setting aside an additional $58 billion especially for artificial intelligence-related technologies and shareholder returns.

By Priya Khosla July 2, 2024

The $58 billion investment will be used to build out SK Hynix’s AI semiconductor manufacturing capabilities, so that it can “improve its competitiveness by focusing on its AI value chain,” Reuters reported. In addition, part of that money will also go toward funding shareholder returns and streamlining the operations of SK Group’s 175 subsidiaries.

SK Group Chairman Chey Tae-won said that “pre-emptive and fundamental change is necessary” for the company to remain competitive. “In the U.S., the wind of AI-related change is so strong that there’s nothing to talk about except that,” he added.

The announcement comes after SK Hynix delivered its first loss in 10 years in fiscal 2022, losing almost $3 billion. However, the company has since recovered, thanks in part to an AI boom that has been good to memory chipmakers. SK Hynix is, along with the U.S. chipmaker Micron Technologies Inc., one of just a handful of companies in the world that’s able to design and build the high-bandwidth dynamic random-access memory chips needed to power advanced AI workloads. Whereas Nvidia Corp’s graphics processing units provide the processing power for AI systems, DRAM chips are just as vital, providing the memory and storage capacity those workloads need.

Earlier this year, SK Hynix announced its first PCIe 5.0 solid-state drive for AI applications, and is also working on a 300-terabyte SSD that’s designed to handle both data center and on-device AI workloads.

“SK Hynix’s massive investment plan is intended to secure it a big slice of the AI chip pie that is sure to expand in the coming years,” Mueller said. “The company is well positioned to make its mark in the AI chip sector due to its existing expertise in regular memory chips, and it comes at a time key, with South Korea’s government recently announcing a big sovereign investment. Chip markets are becoming more national and strategic priorities for governments, and this investment will help to secure SK Hynix as a key and competitive player.”

Meanwhile, SK Group subsidiaries including the mobile carrier SK Telecom and the internet connectivity provider SK Broadband will jointly invest $2.46 billion over the next five years in the AI data center business.

Source: SiliconANGLE. Read the full article here.