SK Group Chairman Chey Tae-won said he is considering building a new memory chip plant in Japan and described cooperation with Kioxia, the Japanese NAND flash maker in which SK hynix (000660) holds a stake, as "one option." He also suggested the group could lay out a concrete investment plan within the year.
Chey made the remarks in an interview with Japan's Asahi Shimbun on the 2nd. Kioxia "is a company with many strengths," he said, indicating the two could work together on joint production, research and development, and shared supply chains. But he added: "If we can no longer build any kind of cooperative relationship, we will end our investment in Kioxia."
SK hynix has an unusual relationship with Kioxia. The two are rivals competing for global market share in NAND flash manufacturing, while SK hynix is also Kioxia's largest shareholder through an indirect investment structured as convertible bonds.
Chey pointed to the partnership between U.S.-based SanDisk and Kioxia as a model. Kioxia has set up a joint venture with SanDisk to co-produce its flagship products, and SanDisk is a strategic ally that plays a central role in developing 10th-generation NAND. Citing that arrangement, Chey said: "If SK hynix is included in Kioxia's future strategy, we are willing to become a partner at any time."
Full-scale cooperation between SK hynix and Kioxia would reshape the NAND flash market, where Samsung Electronics (005930) remains the industry leader while facing a challenge from China's rising Yangtze Memory Technologies (YMTC).
Behind Chey's consideration of an overseas plant is surging demand for data center memory chips driven by the artificial intelligence boom. "Memory chips for data centers are 20% to 30% short of demand," Chey said, adding that large-scale investment already under way in South Korea will not be enough to meet that demand, prompting the company to consider building new plants in Japan and elsewhere.
He also praised Japan's conditions for semiconductor investment. The Asahi Shimbun reported that Chey highlighted Japan's cluster of chipmaking equipment and materials companies and its established production environment. "Looking at it in terms of both risk and culture, Japan is a very attractive candidate," Chey said, adding that several local governments have already approached the company with offers. He did not name specific sites, though earlier reports said SK hynix would build a new memory plant in Miyagi Prefecture.
Kioxia responded positively to Chey's overture. According to the Asahi Shimbun, the company said it cooperates with SK hynix on magnetoresistive random-access memory (MRAM) research and development and that SK hynix is also one of its suppliers of DRAM, a type of memory chip. "We will continue to maintain a good relationship going forward," Kioxia said.
