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Top Team Insights: “One-Team Spirit to Lead the AI Memory Market, Satisfy Demands & Optimize Investments,” Philosophy of Head of Corp Strategy & Planning Byunghoon Ryu

By June 4, 2024 No Comments

The SK hynix Newsroom is running a series of interviews with the Top Team—the executives in charge of the company’s major business divisions. This series provides insights into the business strategies, organizational culture, and more promoted by the leaders to achieve the company’s vision. For this latest interview, the newsroom spoke with Vice President and Head of Corporate Strategy & Planning Byunghoon Ryu.

 

"One-Team Spirit to Lead the AI Memory Market, Satisfy Demands & Optimize Investments," Philosophy of Head of Corp Strategy & Planning Byunghoon Ryu

Following the recent industry downturn, SK hynix returned to profitability in the fourth quarter of 2023 and posted an operating profit of KRW 2.886 trillion (USD 2.099 billion) for the first quarter of 2024. This was made possible as all the company’s workforce participated in efforts to overcome the industry slump from 2022 to 2023 and followed a strategic plan. In the process, head of Corporate Strategy & Planning Byunghoon Ryu helped SK hynix withstand the challenging market conditions by improving company-wide profitability. As the global tech industry continues to rapidly reshape itself around AI, Ryu is taking a deeper look at the market and refining his department’s future strategies with the aim of maximizing profitability.

“One-Team Spirit”: Systematic Collaboration Leading to Market Leadership & Profitability

Led by Ryu, Corporate Strategy & Planning considers and supports the direction of the company’s growth from a long-term perspective. The department’s main role is to identify market conditions, trends, and competitive environments and reflect these insights in the company’s growth strategy to increase profitability. To this end, Corporate Strategy & Planning collaborates with various departments to collect a wide range of information and respond quickly to market changes.

In 2024, Ryu’s department took on several roles including optimizing production and sales as well as improving cost efficiency in manufacturing and R&D. The role of implementing the ESG strategy to support company-wide ESG activities has also been transferred to his team. In addition, he divided his department into Business Strategy and Business Planning functions to enhance each of their expertise. As a result, the department can now analyze short- to long-term strategies, investment efficiency, and even geopolitical issues.

Ryu emphasizes the importance of cross-company collaboration

Ryu emphasizes the importance of cross-company collaboration

 

“Even as we grow, what we emphasize as a team remains quite simple,” Ryu said. “We need to identify low-risk opportunities which produce significant output in relation to our input. We always need to keep that in mind while analyzing the market to come up with the optimal strategy. In the end, it is our mission to promote the company’s growth.”

To achieve this goal, Ryu claims that a so-called “one-team spirit” is key. He stressed that collaboration with employees on a company-wide scale is of the utmost importance, given the characteristics of his department which establishes strategies by analyzing the overall business environment and technology trends as well as reflecting workers’ opinions.

“We can only enhance our global competitiveness when we lay out and discuss data and insights from various departments. For example, we need outlooks about the industry from an R&D department and updates about changes in Silicon Valley’s hardware technology from a department researching advanced technologies,” Ryu said. “We must pursue a one-team mentality as our department needs to be able to interpret the industry trends gathered from across the entire company.”

He cites the company’s SSD products as a case that was developed with such effective collaboration. With the recent rise of AI, high-capacity enterprise SSDs used in AI data centers, as well as HBM1 products, have seen a rise in demand. “By quickly picking up on this demand from work sites and sharing it with our strategy team, we were able to immediately incorporate this change into our business strategy and respond proactively,” Ryu recalled. “Consequently, integrating a culture of working systematically and sharing information in real time across the entire company can have an impact that is worth hundreds of millions of dollars.”

1High Bandwidth Memory (HBM): A high-value, high-performance product that revolutionizes data processing speeds by connecting multiple DRAM chips with through-silicon via (TSV).

A Bright Future for the HBM Market, But Cautious Investment Needed

Ryu revealed departments share market forecasts to make calculated investments

Ryu revealed departments share market forecasts to make calculated investments

 

Since joining SK hynix in January 2023, Ryu has been continuously making efforts to foster a collaborative environment.

“We have created a collaborative system where various departments make their own calculated forecasts about market conditions and share them with other departments,” he explained. “This has allowed us to allocate resources and capital expenditure2 around profitability, reducing forecasting errors and providing visibility in investments. Later in 2024, we will invite a team researching advanced technologies to provide us with technical data and insights that will give us an even clearer picture of the mid- to long-term market.”

2Capital expenditure: Funds used by a company to purchase, upgrade, and maintain physical assets such as buildings, technology, or equipment.

Ryu’s department also developed a market condition analysis tool that is set to be actively used across the company. This model forecasts the conditions of the memory market through regression analysis3 of data from downstream and upstream industries4. Its analysis shows that the HBM market is also in good shape for 2024. Looking ahead, HBM is expected to firmly establish itself as a promising memory product line, following memory solutions for PC, mobile, and servers.

“As AI services become more sophisticated, we run into a memory wall5,” Ryu said. “However, HBM is emerging as a product to overcome this limitation, so we expect demand for this product to grow significantly.”

3Regression analysis: A statistical method to determine the relationship between a dependent variable and one or more independent variables.
4Downstream and upstream industries: Sectors handling different stages of the product manufacturing process. For semiconductor production, the upstream industry handles the materials required for production, while the downstream industry deals with the actual production of consumer products such as PCs and smartphones.
5Memory wall: A computing phenomenon in which the processor pauses operations because data that needs to be processed has yet to arrive from the memory. Memory therefore determines the performance of computing.

Ryu, nevertheless, does not expect everything to go as planned. As a result, he is cautious of the many variables to consider going forward.

“We need to pay attention to downstream industries,” he emphasized. “Many AI companies are heavily backed by venture capital, and there is demand that also stems from the fear of missing out (FOMO) on a potentially lucrative investment. While growth is set to be robust in the short term, we need to be mindful of possible fluctuations until downstream industries become more established. In addition, we also need to cautiously increase our investments keeping in mind the construction speed of AI data centers. We will be watching all of these signals closely to forecast demand and build the most efficient and effective strategy.”

Responding to Strong Demand of Customized AI Solutions With a Top-Down Approach

Ryu hopes his department can provide stability and adaptability during the unpredictable AI era

Ryu hopes his department can provide stability and adaptability during the unpredictable AI era

 

Ryu has a long history of building up capabilities in the IT and semiconductor industries while delivering positive results at various companies within SK Group. During his time at SK Telecom in 2012, he played a role in the acquisition of Hynix Semiconductor before the company merged with SK Group to become SK hynix. Through this process, he became familiar with the characteristics of the semiconductor industry’s downstream and upstream sectors. When working at other affiliate companies such as SK C&C and SK Square later on, Ryu also learned about the developments and investment trends in the IT industry. Now, he is working towards three specific goals.

“The short-term goal is to find the optimum point from a production and investment perspective of where to concentrate our resources and determine which product lineups to strengthen,” he explained. “As for our mid- to long-term goal, we aim to identify technological, business, and macroeconomic factors that will drive changes in the market, such as generative AI. Finally, the long-term goal is to establish a global operating system. If we sense changes in the supply chain of Silicon Valley, for instance, we want to immediately reflect these changes in our decision-making and swiftly make adjustments to our production and investments.”

In particular, Ryu emphasized the need for an advanced operating system that can respond to rapid fluctuations in the future semiconductor market caused by geopolitical developments, changes in the supply chain, and cross sector M&As. To establish such a system, Ryu is committed to developing insights and foresights by employing a top-down approach which starts by looking at the big picture and then fills in the smaller details.

“When looking at the AI market as a whole, there is a trend for businesses in the downstream sector to increase efficiency while minimizing spending,” he said. “This tells us that demand for customized products is increasing. We believe that collaborative efforts to address the competitive environment and the need for customer-centric service will become more important in the future. We will continue to develop our future strategies in this way.”

Lastly, Ryu again reiterated the value of collaboration to employees.

“If we showed our one-team spirit in 2023 by overcoming the recent downturn, this year the spirit would involve interpreting and sharing IT trends in various ways,” he said. “Communication and sharing information are the most important values at Corporate Strategy & Planning, so I urge all our employees to take this to heart. Just as our CEO Kwak Noh-Jung emphasized in his New Year’s message, let us make 2024 the beginning of SK hynix’s renaissance.”