Chey Tae-won, chairman of SK Group.
Qilai Shen/Bloomberg
SK Square, the investment arm of South Korean billionaire Chey Tae-won’s SK Group, plans to inject 2 trillion won ($1.6 billion) into semiconductors over the next three years as demand for chips remains high.
Investments in “advanced semiconductor markets” such as the U.S. and Japan are high-priority targets for SK Group, said a company spokesperson. SK Square is “reviewing companies belonging to the global semiconductor value chain from small-scale companies to large-scale companies,” the spokesperson added. “Companies that play an important role in the global semiconductor value chain are the target for investment.”
South Korean media reported earlier this week that Park Jung-ho, CEO of SK Square and co-CEO of chip maker SK Hynix, said SK Hynix is considering forming a consortium with strategic investors to acquire British chip design specialist Arm from SoftBank.
The Japanese tech giant bought Arm for $32 billion in 2016. In February, a proposed acquisition of Arm by U.S. graphics chip giant Nvidia, led by billionaire Jensen Huang, fell through after regulators raised antitrust concerns.
The quest for more semiconductor deals fits with SK Square’s own legacy, analysts say, and it will give the investor higher stakes in an ever-growing foundation of the global tech supply chain.
Semiconductors represent a solid investment due to the “supply crunch” this year, as well as for 5G-6G wireless protocol, artificial intelligence and high-performance computing, says Cheng Kai-an, senior industry analyst with the Taipei-based Market Intelligence & Consulting Institute.
Tech was already in the investor’s blood. SK Square spun off from SK Telecom, the flagship company of the SK Group conglomerate, in November and it is the largest shareholder of SK Hynix, one of the world’s biggest memory-chip makers.
“SK Square has a long history of investing in next-generation semiconductors, information and communications technologies as the investment arm of SK Telecom,” says Sean Su, an independent tech sector analyst in Taiwan. “It’s only natural that they’d want to own shares in companies that manufacture those chips that power the aforementioned, to be fully diversified in growth-opportunity areas.”
One of SK Group’s most successful investments was the acquisition of SK Hynix. Founded in 1983 as Hyundai Electronic Industrial, the Hyundai empire’s answer to Samsung Electronics, the company went public in 1996 and Hyundai completely spun it off in 2001. Over the next ten years it was in and out of financial trouble until SK Telecom bought a 20.5% stake from its creditor banks and added SK to its name in 2012. Today SK Hynix is South Korea’s second-biggest manufacturer of memory chips, behind Samsung Electronics.
More recently, SK Square bought a 35% stake in Korbit, one of Korea’s major cryptocurrency exchanges, for 90 billion won (about $75.5 million). SK Square became Korbit’s second-largest shareholder after the late Korean billionaire Kim Jung-ju’s NXC, the holding company of online game giant Nexon. SK Group had already been investing in biotech and electric vehicle batteries.