Preparation for New Growth Opportunities in Expanding AI Market
The global AI market is growing at an unprecedented pace. Driven by the wide adoption of generative AI, demand for AI infrastructure is also growing rapidly, becoming a driving force for mid- to long-term growth.
Amid this trend, global companies are competitively entering the AI race allocating significant resources to R&D, making extensive investments, and restructuring their businesses to secure AI technology competitiveness. In response to these changes, SK hynix is also taking multifaceted approaches to the AI industry and exploring new growth opportunities.
Targeting AI Datacenter Leadership with Competitiveness in Memory
As AI technology advances, a large portion of performance limitations can be attributed to memory bottleneck, rather than computing capability. Therefore, memory has become a key element in the AI competition, as companies race to optimize the efficiency of the entire system rather than simply improving the performance of individual chips.
These changes call for a structural shift in the role of memory companies, evolving from the current component provider to a partner in the AI datacenter ecosystem that designs the overall performance and efficiency of the system. With its world-class memory technology, SK hynix is at a critical turning point where it can expand its role to become a creator of new growth engines in the AI ecosystem.
‘AI Company’ is SK hynix’s New Endeavor in Preparation for AI Era
SK hynix is launching AI Company1 to proactively prepare for the rapid changes in the AI industry and systematically secure growth engines for the future.
1An AI-focused investment company launching in February. Its official corporate name to be announced once finalized.
As memory becomes increasingly important in the AI ecosystem, an opportunity has been created for SK hynix to leap forward as a key AI player and the company is effectively entering the main battlefield of AI ecosystem creation. With a strong foundation of AI memory competitiveness, SK hynix has decided to establish AI Company as a dedicated organization to maintain a multifaceted view of AI technology and the market to drive action.
AI Company Drives AI Investments and Solutions Commercialization
The world’s AI industry is currently revolving around the US with new technologies and companies fast emerging from the region. The market is also witnessing the rise of integrated AI solutions – not just standalone products – that combine hardware, software and services. To respond to this shift, companies are required to run units dedicated to managing investment portfolios for AI and building flexible and agile business structures.
AI Company to be Located in US, Epicenter of Global AI DC Ecosystem and AI Industry
AI Company will proactively secure companies with core AI capabilities in the US, an epicenter of tectonic shifts reshaping the global AI industry, and pursue AI solution commercialization opportunities.
Furthermore, AI Company will operate as an independent organization that can make investment decisions based on technical expertise, an agile decision-making system, and a flexible business structure, implementing new growth models required for the AI era in phases.
The launch of AI Company will enable SK hynix to leverage its technical prowess as a memory supplier to transition into a strategic partner role, driving the development of the AI industry. Furthermore, the capabilities acquired in this role will be linked to create synergy with SK Group’s subsidiaries and affiliates.
SK hynix to Bolster National AI Competitiveness Through Sustained Domestic Investment
While responding to the changing global AI environment, SK hynix is also evaluating its mid-to long-term growth direction to strengthen Korea’s industrial ecosystem.
Investments and business initiatives through AI Company are ultimately aimed at enhancing the competitiveness of Korea’s AI industry. Exploring the potential of the domestic AI ecosystem, SK hynix will try to expand ties between global AI leaders and domestic companies.
In addition to overseas investments, SK hynix is also steadily pursuing investments aimed at strengthening the competitiveness of the domestic semiconductor industry, including the construction of the Yongin Semiconductor Cluster and the recently announced investment in P&T7 in Cheongju.
These domestic and international investments are being carried out in parallel, each with its own strategic purpose and role. SK hynix plans to continue uncovering the potential of the domestic AI industry ecosystem and review plans to contribute to strengthening industrial competitiveness from a mid- to long-term perspective.
The establishment of AI company is another key element of SK hynix’s mid- to long-term growth strategy for the AI era. SK hynix will continue its endeavor by proactively responding to changes in the global AI market and simultaneously strengthening its technical competitiveness and business capabilities.
Q&A ——————————————————————————————
Please refer to the Q&A below, focusing on questions stakeholders may be interested in regarding the background and progress of the establishment of AI Company.
Q1. How is the establishment of AI Company being funded?
A. To secure initial funding, we have decided to invest 10 billion USD. However, the USD 10 billion will be structured as a capital call reserve, under which funds are deployed at the request of AI Co. to fund investments. SK hynix’s fundamentals are more than sufficient to enable this investment and will be executed flexibly according to the situation.
Q2. How will AI Company be established?
A. SK hynix will establish AI Company through the restructuring of Solidigm (SK hynix NAND Product Solutions Corp.), its California-based enterprise SSD manufacturing subsidiary.
In this process, Solidigm will maintain its entity under the name, AI Co., while transferring its business operations to a new subsidiary, to be named Solidigm Inc., to ensure brand continuity.
AI Co. will serve as an AI-focused business arm, driving SK hynix’s AI strategy forward. The corporate name of AI Co. will be officially announced later this year.
Q3. What is the reason Solidigm is placed under the company?
A. With its eSSD business, Solidigm is already a key player in the AI datacenter ecosystem. By placing Solidigm under AI company, we aim to look for collaboration and business opportunities that can create synergy with various business areas within the AI industry.
Q4. When will the official name for AI Company be decided?
A. It will be announced at the February launch. We will start with an interim management team and a board of directors, later transitioning to a permanent management group comprised of local experts with US market depth.
Q5. In what specific technology areas do you plan to invest? Are there any overlaps with SK hynix’s internal R&D?
A. To secure diverse AI solution capabilities beyond our existing foundation we plan to first focus on SW for AI system-level optimization, and then gradually expand our investments within the AI data center ecosystem.
