By Hyunjoo Jin
SEOUL, July 10 (Reuters) – When South Korean billionaire Chey Tae-won rang the Nasdaq’s opening bell for SK Hynix’s $26.5 billion listing on Friday, it marked the ultimate payoff of a bet many once considered risky: buying a loss-making chipmaker that has since become an AI powerhouse.
SK Group’s 2012 acquisition of Hynix was viewed as problematic even within the business conglomerate: Memory chips are cyclical and capital-intensive, and the company was losing money while trailing Samsung Electronics in market share and technology.
But under Chey, seeking an edge over Samsung, SK Hynix has spent more than a decade betting on high-bandwidth memory (HBM) chips, at the time a niche technology. The wager paid off as HBM became a critical component in Nvidia’s AI accelerators, helping SK Hynix emerge as the world’s biggest producer of the chip.
“This is a truly historical moment. We’ve been waiting for a long, long time,” he said during an interview with CNBC on Friday. “It is a kind of dream and now it is a dream come true,” he said.
“SK is our largest memory partner. Without SK’s partnership, today’s AI industry would not have developed as wonderfully as it has,” Nvidia CEO Jensen Huang told reporters in Seoul in June, with the 65-year-old Chey standing beside him.
Kim Dae-il, a former SK Hynix board member and economics professor at Seoul National University, said Chey promoted executives from within Hynix rather than bringing in managers from the SK Group. He credited Park Sung-wook, a longtime chip engineer, who was appointed as CEO in 2013, with refusing to give up on HBM even amid skepticism among board members.
“There was enormous investment behind SK Hynix’s rise to that position. Ultimately, Chairman Chey’s achievement was making the right bets and putting the right people in place,” Kim said.
SK Hynix and SK Group did not immediately respond to Reuters’ requests for comment.
CONCERNS OVER SLOWER AI SPENDING
Yet even as SK Hynix rides the AI boom, Chey, who studied physics at Korea University and undertook postgraduate work in economics at the University of Chicago, faces growing concerns that demand may not keep pace with soaring memory prices.
“We are facing a shortage of memory supply, which in some ways is a welcome problem for me,” Chey said in a speech in April.
“People may say, ‘Isn’t it good because you’re making a lot of money?’ But this situation cannot last forever,” he said.
Last week, both SK Hynix and Samsung announced pledges to invest hundreds of billions of dollars in new South Korean chip plants to meet surging demand after President Lee Jae Myung called for measures to narrow regional economic divides.
