SK takes aim at chips, batteries, bio with $195 billion investment

SK Group, South Korea’s second-largest conglomerate after Samsung, on Thursday announced a plan to invest 247 trillion won ($195 billion) in key growth sectors such as semiconductors, batteries and biotechnology over the next five years.

SK, which owns the world’s second-largest memory chipmaker SK Hynix Inc., said 142.2 trillion won, or nearly 60% of the total spending, through 2026, is earmarked for establishing a local semiconductor ecosystem, including the launch of a chip cluster, expansion of chip fabrication facilities and increased purchase of chipmaking equipment.

“At the center of the Fourth Industrial Revolution such as digital transformation and artificial intelligence lie semiconductors. Chips are our future,” the energy-to-telecom conglomerate said in a statement.

The group said 67.4 trillion won will go into its green energy business, including electric vehicle batteries, while 24.9 trillion won will be spent on advancing digital technologies such as 5G networks. The remaining 12.7 trillion won will be used for expanding its biopharmaceutical business, it said.

SK is the latest major Korean conglomerate to unveil huge spending plans in response to new South Korean President Yoon Suk-yeol's call for increased corporate investment to revitalize the local economy.

On Thursday, LG Group and POSCO also announced that they will invest 106 trillion won and 40 trillion won, respectively, in their core businesses over the next five years.

Their spending plans followed Samsung’s announcement two days earlier that it will invest 450 trillion won through 2026 in strategic sectors such as semiconductors, biotechnology and 6G telecommunications.

Hyundai Motor Group, which houses the country’s two largest automakers, Hyundai Motor Co. and Kia Corp., said on Wednesday it will spend 63 trillion won in its domestic businesses through 2025 to strengthen competitiveness in electrification, robotics and urban air mobility (UAM) as well as gasoline cars.

OVER TWO-THIRDS OF INVESTMENT IN KOREA

SK Group said 179 trillion won, or 73% of its total investment plans, is marked for spending in Korea with an aim to create 50,000 new jobs to boost the local economy.

 
SK Hynix, the conglomerate’s flagship unit, is pushing for a 120 trillion won project to build a chip cluster in Yongin, south of Seoul, to accommodate over 50 local manufacturers and suppliers of semiconductor materials, components and equipment.

The group is also actively investing in batteries, battery materials, hydrogen and other renewable energy businesses.

With the 67.4 trillion won investment in its green business, SK aims to reduce carbon emissions by 200 million tons, or about 1% of the worldwide initiative to cut emissions by 2.1 billion tons as of 2030.

In Korea, SK became the first business conglomerate to officially join the renewable energy 100 (RE100) initiative in November 2020 to spearhead the global campaign to cut the corporate carbon footprint.

BIOTECHNOLOGY

In the biotechnology sector, SK Group said it aims to enhance its presence in the business of drug-making for other companies under contract development and manufacturing organization (CDMO) programs.

SK Bioscience Co. and other Korean biopharmaceutical companies have said they are close to commercializing their own COVID-19 vaccine and treatment pills as they are on the brink of completing their final rounds of clinical trials.

Currently, SK is producing COVID-19 vaccines under contract for its two global pharmaceutical clients – AstraZeneca plc and Novavax Inc.

In March, SK Bioscience CEO Ahn Jae-yong said the company is seeking multi-billion-dollar mergers and acquisitions to expand its business portfolio from contract manufacturing to gene therapy development.

SK Group’s digital business is led by SK Telecom Co., the country’s largest mobile carrier, which counts artificial intelligence as one of its future growth engines.

The group said in February that its Group Chairman Chey Tae-won will double as chairman of SK Telecom to facilitate the group’s digital innovation efforts.

Write to Kyung-Min Kang at Kkm1026@hankyung.com
In-Soo Nam edited this article.