SK Group Chairman Chey Tae-won diagnosed a severe global supply crunch in memory semiconductors, going so far as to describe the situation as “utter chaos.” He revealed that competition among customers to secure supply is intensifying, and in response, the conglomerate is pursuing aggressive investment plans that include evaluating new semiconductor fabrication plant construction at all potential sites worldwide, including the United States.
In a series of public remarks on the 19th and 20th, Chairman Chey stated, “Hardly any company will have increased supply next year,” adding, “I myself am receiving requests from everywhere—lobbying, pressure, all of it.” He further noted, “There is a high probability that our government will also start to feel this pressure from other governments,” suggesting the semiconductor supply crisis could escalate beyond a mere industrial issue into a trade and diplomatic matter.
He projected that demand for AI semiconductors could increase by 60% to as much as 100% next year. In contrast, supply growth is expected to fall far short, meaning the supply-demand imbalance is likely to persist for some time. Chairman Chey also expressed concern over current high memory prices. “Current memory prices are at an abnormally high level,” he said, pointing out that while AI companies can absorb rising costs with their investment funding, PC and smartphone manufacturers have no choice but to pass semiconductor price hikes onto consumers, which could shrink the market.
Consequently, SK Group has formulated a strategy to increase supply and protect the market for shared growth, even if it means accepting lower margins. “If we just keep raising prices without building factories, the market will shrink and new entrants will inevitably jump in,” Chairman Chey emphasized. “If South Korea’s semiconductor industry is to be maintained and developed, now is the right time to expand supply capacity.”
Alongside South Korea’s Honam region, where a 400 trillion won (approximately $270.2 billion) investment is planned, the United States is being strongly considered as a location for new plants. Referencing U.S. Commerce Secretary Howard Lutnick’s request for investment in America, Chairman Chey said, “I think we will have to build not only in Honam but also in the United States. If possible, I believe we should build there.” He added, “There is trade pressure and various other issues that need to be considered,” effectively signaling that a U.S. factory construction is becoming a fait accompli.
He stressed the need for speed, saying, “We need to find every possible location around the world, put them in a report, prioritize which site is best, fastest, and can be built on the largest scale, and then build quickly.” Regarding the Honam semiconductor cluster, he urged the government and local authorities to play an active role in infrastructure development, noting, “We haven’t been able to find another location that perfectly meets all the conditions needed for South Korea.”
Chairman Chey also publicly addressed the large-scale performance bonus controversy recently triggered at SK Hynix for the first time. “I want to give as much happiness as possible to our employees, but there is a condition that we must be happy together with our stakeholders,” he said. “If employee happiness infringes upon stakeholders, then for the sake of sustainable happiness, we are in a situation where we must address that issue.” However, he added, “If everyone disliked it, it would be a real problem, but I don’t see it that way. I understand there are even people who are not SK Hynix employees who view it favorably. I think there are certainly positive effects as well,” leaving the door open for potential adjustments to the system while signaling a cautious approach.
Regarding the Ministry of Employment and Labor’s proposal for sharing AI windfall profits, he took a largely reserved stance, saying, “I don’t quite understand the concept yet.” He commented, “There’s no reason to object to the government doing its job with the taxes we pay,” but added, “We must do something to make stakeholders happy, but I’m not sure if that is the direction we are thinking of.”
He also reiterated the need for exemptions to the 52-hour workweek cap to enable a “speed war” in semiconductors. Chairman Chey said, “I heard that if a mega special zone is created and companies move to regional areas, a suspension of the 52-hour workweek is being considered.” He added, “Business owners must comply with the 52-hour system, but if a worker wants to work more, they should be allowed to, yet that isn’t permitted either. I wish free will were respected.”
He also delivered a sobering diagnosis of South Korea’s overall manufacturing sector. “It’s not that manufacturing competitiveness is good; it’s that semiconductors are making money because demand has increased by riding the AI trend,” he pointed out. “There is still no sign that AI has increased productivity or created better products.” He went on to stress the need for regulatory reforms, including inheritance tax, arguing that “even though we have entered a low-growth era, we are still maintaining the systems from the past high-growth era.”
“Small and medium-sized enterprises and mid-sized companies no longer try to grow bigger. If companies feel no need for growth, where will the growth engine and motivation come from?” he added. “Only by returning to growth policies will we have the leeway to solve distribution problems.”