South Korea’s SK Hynix will invest $74.6bn by 2028 to bolster its chip business after the company suffered heavy losses to its electric vehicle battery arm. 

SK Group, the parent company of SK Hynix, said it also plans to secure 80 trillion won ($57.4bn) by 2026 to invest in AI and semiconductors.

The company said it will focus on its AI value chain to improve its competitiveness in the market. The investment will be placed into its AI data centres, AI services and high bandwidth memory chips. 

In May, the South Korean government announced a $19bn support package for chip businesses, as the country has fallen behind in some areas of chip manufacturing globally.

South Korea’s chip industry accounted for 18% of the country’s entire exports in April; however, the country’s market share of chip designing was just 1%.

Led by companies such as NVIDIA and Taiwan Semiconductor Manufacturing Company (TSMC), South Korea’s fabless sector has fallen behind, according to the government office.

TSMC reported a 34.3% year-on-year increase in revenue during March 2024, largely credited to rising global interest in and adoption of AI. 

Currently, South Korea, which is home to Samsung Electronics and SK Hynix, leads in the production of DRAM and NAND memory chips, which are key to managing and storing data on PCs, smartphones, and SD cards, commanding over 60% of the market share.

The country is now looking to expand its presence in the production of other types of chips and processors, as it hopes to strengthen its position in the semiconductor industry.

GlobalData forecasts that the overall AI market will be worth $909bn by 2030, having grown at a compound annual growth rate (CAGR) of 35% between 2022 and 2030. In the GenAI space, revenues are expected to grow from $1.8bn in 2022 to $33bn in 2027 at a CAGR of 80%.

GenAI is expected to become ubiquitous across every industry and a catalyst for broader AI capabilities such as machine learning, computer vision and autonomous robots.