Chey Tae-won: "Joint production with KIOXIA is possible... Investment will end without cooperation"

【Financial News, Tokyo = Correspondent Hye-jin Seo】SK Group Chairman Chey Tae-won said he was considering building a semiconductor plant in Japan, calling joint production with Japan’s KIOXIA "one possible option." After saying on the 31st of last month that investment in Japan was "currently under review," he offered a more detailed outline of potential cooperation with KIOXIA, including joint production, research and development (R&D), and supply-chain sharing.
According to The Asahi Shimbun on the 2nd, Chey said in an interview the previous day, "KIOXIA is a company with many strengths," and made the remarks.
SK hynix and KIOXIA compete in the NAND flash market but are also linked through an investment relationship. SK hynix indirectly holds a stake in KIOXIA through a special-purpose company (SPC) operated by Bain Capital. If the SPC converts the convertible bonds it issued into shares, SK hynix could increase its influence over KIOXIA.
Chey cited KIOXIA’s joint venture with SanDisk, which jointly produces its main products, as a possible model for cooperation. "If SK hynix is included in KIOXIA’s future strategy, we are willing to become a partner at any time," he said, also mentioning the possibility of building a joint plant.
Chey also indicated that the investment relationship could be terminated if it proved difficult to develop it into business cooperation. "If we can no longer establish any kind of cooperative relationship, we will end our investment in KIOXIA," he said.
SK hynix has been considering cooperation in its NAND business with customers and partner companies. Noh-Jung Kwak, CEO of SK hynix, recently said, "We are carefully reviewing ways to jointly develop the NAND flash market with our customers and partner companies."
Cooperation between the two companies could also affect the global NAND market landscape. According to Counterpoint Research, Samsung Electronics ranked first in NAND shipments from April to June this year with a 25% share, followed by SK hynix with 22% and KIOXIA with 14%. Combined, SK hynix and KIOXIA would hold 36%, exceeding Samsung Electronics’ share.
The backdrop to Chey’s consideration of expanding overseas production bases, including in Japan, is a shortage of memory semiconductors driven by the spread of generative artificial intelligence (AI). Chey assessed that data-center memory semiconductors were "20–30% short" of demand and said the large-scale investments underway in South Korea alone would not be enough to meet demand.
Japan has a concentration of semiconductor equipment and materials companies. It is home to Namics, a semiconductor materials company that works with SK hynix, and equipment maker Tokyo Electron, as well as major customers such as Sony Group and Nintendo. Micron Technology also operates a semiconductor plant in Hiroshima.
Chey described Japan as "a very attractive candidate location, even from the perspectives of risk and culture," citing its industrial base and manufacturing-oriented culture. With several Japanese local governments seeking to attract an SK plant, The Asahi Shimbun reported that a specific investment policy could be announced as early as this year.
Active support from the Japanese government for semiconductor investment is another factor enhancing Japan’s competitiveness as a location. The Japanese government has provided large subsidies for overseas companies, including Taiwan Semiconductor Manufacturing Company (TSMC), to build and expand production facilities, such as TSMC’s Kumamoto plant.
SK hynix is also expanding its investment in the United States. On the 27th of last month, it held a groundbreaking ceremony in West Lafayette, Indiana, for a next-generation high-bandwidth memory (HBM) advanced packaging plant. If the Japan investment is finalized, the company will further expand its overseas production base following the United States.
Chey also emphasized his vision for a Korea-Japan economic community at the Korea-Japan Symposium on Measures to Address Low Birth Rates, held in Sendai on the 30th of last month. "When the population is declining, we need to expand the market," he said. "To create a larger market, the two countries need to strengthen their ties to the level of a community."
Meanwhile, regarding the report, KIOXIA said, "We are collaborating with SK hynix on MRAM R&D, and SK hynix is one of our DRAM suppliers," adding, "We hope to maintain a good relationship going forward."

[email protected] Hye-jin Seo Reporter