SK Group Chairman Emphasizes AI Chip Supply Chain Collaboration and Operational Improvements

SK Chairman Chey highlights partnership with Nvidia, TSMC for AI chip supply chain

SK Chairman Chey highlights partnership with Nvidia, TSMC for AI chip supply chain SK Group Chairman Chey Tae-won delivers a keynote speech at AI Summit 2024 in Gangnam District, Seoul, Nov. 4. Yonhap Chey Tae-won, chairman of semiconductor-to-energy conglomerate SK Group, on Monday emphasized the trilateral partnership among SK hynix, Nvidia and Taiwan Semiconductor Manufacturing (TSMC) in building the supply chain of the global artificial intelligence (AI) chip industry. "AI will bring about massive changes in our lives and society. We must shape these changes to benefit us," Chey said in his keynote speech at the AI Summit 2024 in Seoul, noting that the collaboration between Microsoft and OpenAI has been pivotal in launching the AI era with ChatGPT. "To create a future led by AI, we will face challenges that require collective problem-solving," he added. "At this point, we need broad participation and cooperation." Chey highlighted SK Group's chipmaking affiliate, SK hynix, as a major supplier of high-bandwidth memory (HBM) chips, which are essential for AI computing. He pointed to the deepening cooperation between SK hynix and U.S. tech giant Nvidia, whose AI accelerators are critical for data centers and AI computing infrastructure. The Korean chipmaker started to supply the fifth-generation HBM3E chips to Nvidia for the first time in March and recently initiated mass production of its advanced 12-layer HBM3E chips. "When Nvidia comes up with new, more advanced GPUs, it requires more HBM chips," Chey explained. "That's why SK hynix is working hard to keep up. Developing advanced HBM products and maintaining high yields is challenging, so closer cooperation with Nvidia is essential." Chey noted that Nvidia CEO Jensen Huang had requested SK hynix to advance the supply schedule for the upcoming HBM4 chips by six months during their latest meeting. "Every time Nvidia launches new GPUs, they ask us for more HBMs and push us to accelerate production," Chey said. "Although I don't make those decisions alone, I consulted SK hynix CEO Kwak Noh-jung, who committed to trying to meet the demand." According to earlier plans, SK hynix expects to ship 12-high HBM4 products next year and launch 16-high HBM4 products by 2026. He also stressed close partnership with TSMC, the world's largest foundry, or semiconductor contract manufacturing company. "Even though you can design a high-performing chip, it's useless if you can't manufacture it," he said. "SK hynix is working with Nvidia and TSMC, and making collective efforts to address the AI chip supply shortage." During Chey's keynote speech, Microsoft CEO Satya Nadella and TSMC CEO C.C. Wei delivered video messages for the AI Summit 2024, while Nvidia CEO Jensen Huang participated in an online conversation with Professor David Patterson from UC Berkeley. (Yonhap)

SK chairman calls for operational improvements in face of AI

SK Group Chairman Chey Tae-won speaks during the closing ceremony of the 2024 SK Group CEO Seminar in Icheon, Gyeonggi Province, Saturday. Courtesy of SK Group Chey predicts inflection point for AI will come around 2027By Nam Hyun-woo SK Group Chairman Chey Tae-won called for an overall improvement in the operation of SK companies in the face of the rapid growth of the artificial intelligence (AI) industry. According to the conglomerate, Sunday, Chairman Chey, Executive Vice Chairman Chey Jae-won and more than 30 top executives of affiliates, held an annual seminar in Icheon, Gyeonggi Province -- from Oct. 31 to Saturday -- to review their respective performances this year. During his closing remarks on Saturday, Chairman Chey said "the rapid expansion of the AI market, driven by the emergence of next-generation AI models, is likely to peak around 2027," and that SK Group "should capitalize on this growth opportunity by expediting its operation improvement efforts." To seize this opportunity within the AI industry, Chairman Chey emphasized that the group should leverage its own technologies and collaborate across group affiliates and outside partners to build "the most cost-effective and high-quality AI data center" which will scale up the group's AI businesses to a global level. To this end, the chairman outlined key focus areas, including boosting competitiveness in AI chip design and packaging, fostering demand for AI services based on customer needs and accelerating the development of energy solutions to meet the anticipated surge in power consumption. Chey's strategic focus is in line with the recent upheaval in the global semiconductor industry in the wake of the rapid expansion of AI services. Buoyed by its solid leadership in high-bandwidth memory (HBM) chips that Nvidia requires for its AI processors, chipmaker SK hynix's operating profit outpaced that of its rival Samsung Electronics in the third quarter of this year, and the company is expected to become the most profitable Korean chipmaker by the end of this year. SK hynix shared its success story with other affiliates during the seminar. SK hynix CEO Kwak Noh-jung said "the improvement was not just a result of a semiconductor market recovery" but a result of "bold decisions," such as repurposing a NAND flash production line into an HBM line, maximizing profitability through data-driven decision-making and encouraging a "one team spirit" among employees. SK Group Chairman Chey Tae-won speaks during the closing ceremony of the 2024 SK Group CEO Seminar in Icheon, Gyeonggi Province, Saturday. Courtesy of SK Group Alongside SK hynix's turnaround, SK Group reported that group-wide efforts to enhance cash flow and unload assets have led to a reduction in its net debt, declining to approximately 70 trillion won ($50.7 billion) in the third quarter from 84 trillion won last year. The group attributed this progress to its ongoing operational improvement initiatives and promised to build upon the current momentum by accelerating operational improvement programs. The chairman noted that operational improvements should extend beyond cost savings and efficiency gains to become a process that secures fundamental competitiveness. To this end, he emphasized that CEOs should focus on intangible yet vital management elements such as entrepreneurship or communications with stakeholders, even though these elements are difficult to quantify in financial statements. To this end, Chairman Chey stressed the importance of using AI in the workflow, encouraging young employees and leaders to propose AI-driven solutions. The chairman suggested that management should incorporate these ideas into company policies and systems. "To avoid past mistakes, we have to closely monitor the environmental changes in the macroeconomics, establish forecasting systems tailored to the specific needs of each unit and make efforts to quantify and measure the progress of our operational improvements," Chairman Chey said.