SK Group Chairman Chey Tae-won smiles broadly as SK hynix’s American Depositary Receipts (ADRs) opened at $170, above the IPO price of $149, during a press meeting held at the Nasdaq MarketSite in Manhattan, New York, on the 10th (local time). New York — Yoon Kyung-hwan, Correspondent
On the 10th, when SK hynix’s (000660.KS) American depositary receipts (ADRs) successfully listed on the Nasdaq market, SK Group Chairman Chey Tae-won made a series of remarks aimed at dispelling concerns among global markets over a peak in memory semiconductors. His assessment is that the very cyclical structure in which industry conditions rose and fell has changed altogether. In particular, he stressed that demand for memory semiconductors is bound to increase because the more artificial intelligence (AI) models are developed, the greater the demand for “Key-Value Caching,” a technology that stores memory at intermediate stages.
Chairman Chey held a press briefing with correspondents immediately after the listing ceremony at the Nasdaq MarketSite in Manhattan, New York, that day, and laid out his blueprint for the future. “When demand grew, there was a boom, and when supply increased, there was a downturn, but now (the semiconductor industry) clearly does not move on the same cycle as before,” he said. “Right now the gap between demand and supply is enormous, and in terms of growth rate, demand is outpacing supply.” His analysis was that memory semiconductor supply faces limits because production facilities must be built carefully and selectively, while demand continues to surge without pause due to rising usage of AI tokens (basic units of words or sentences).
“As even ordinary people use AI tokens enormously, the Key-Value (KV) cache that must be stored somewhere without being deleted is increasing,” Chairman Chey said. The KV cache is an optimization technology that stores data in memory so that a large language model (LLM) does not recalculate from scratch each time it generates text, and reuses it by comparing it against new queries.
“Recently, when AI companies set token prices, the core cost arises not only from computation time but also from KV caching,” he said. “The point is that it is necessary for consumers to decide whether or not to store the KV caching, in order to make central processing unit (CPU) and graphics processing unit (GPU) costs more efficient.”
In this regard, Chairman Chey also introduced the concept of “Memory as a Service (MaaS)” in an interview with Bloomberg TV. “In the future, as a memory service provider, we may be able to offer yet another business model such as Memory as a Service,” he explained.
Chairman Chey also cited, as grounds for the need to expand supply, the point that industries that serve as sales destinations could shrink if memory semiconductor prices become too expensive. “The market is not only in the AI sector, so if memory prices become too expensive, traditional industries such as retail and automobiles will face difficulties, and the semiconductor industry will also die,” he said. “When I go to Japan, they say they are reviewing a Japanese plant, and when I go to the U.S., they say they are reviewing a U.S. plant, and even carrying out maximum investment would not be enough.”
Regarding the pursuit by China’s semiconductor industry, Chairman Chey said, “Chinese companies are escaping the red and turning to profit. Through initial public offerings (IPOs) as well, they are gaining fairly large profits and continuing to build capacity for facility investment.” He added, “We are prepared for China to catch up at quite a fast pace.”
“SK hynix, too, needs to develop technology options through strategic investment and turn these into new businesses,” he said. “We did this in the past, but now we have to do it 10 times faster than before. That is the most difficult task right now.”
Regarding U.S. demands for investment in the United States, Chairman Chey concurred, saying, “Since the U.S. is pushing reshoring of manufacturing (the return of overseas business sites to the home country) as a policy, semiconductors will naturally fall under that.”
However, on the fact that U.S. Commerce Secretary Howard Lutnick had, the previous day, also asked SK hynix and Samsung Electronics to invest in the United States, he drew a line, saying, “For people who run businesses, doing something to match the U.S. election schedule or someone’s term of office is not a consideration.” Chairman Chey said, “The important point is the fact that the largest market is in the U.S. and quite a large number of customers also come out of the U.S.” He added, “Customers strongly want their suppliers to maintain security and want facilities built in the U.S. as well, so we will decide after looking at that.”
Chairman Chey also revealed a plan to use ADRs as stock options, employing them as a compensation measure to recruit global talent. On having jointly developed HBM4, the latest HBM that goes into Nvidia’s next-generation accelerators, with Taiwan’s TSMC, he explained, “As we have come to use TSMC’s logic foundry, we have become quite a large customer of TSMC.”