SK Group Chairman Chey Tae-won predicted a bumpy future for the semiconductor industry, saying the “roller-coaster ride is likely to continue” for a while. Regarding the electric vehicle (EV) battery sector’s recent downturn, he asserted that “the sector will recover in the long run.”
Chey noted that while the semiconductor sector has been showing signs of a rebound this year compared to the severe downturn last year, he added, “This trend is unlikely to last long.” He addressed such issues during a Korea Chamber of Commerce and Industry press conference on May 2, where he also serves as president.
South Korea’s leading chipmakers, Samsung Electronics and SK Hynix, have been ramping up production of advanced memory chips, which are becoming smaller and more intricate. “Given the considerable challenges in semiconductor miniaturization, chipmakers have leaned toward meeting the demand for this process, which has led to investing in more production lines to increase supply,” Chey explained. “As a result, we keep running into problems that cannot be resolved solely through technology but require solutions involving capital expenditures,” he said.
“Since companies relying solely on self-funded investments is unsustainable in the long-term, a global competition to host chip manufacturing hubs has emerged, leading to all this talk surrounding subsidies,” he added. “Korea also needs to address the issue of large capital expenditures because, without government support, the semiconductor industry will increasingly gravitate towards regions with better business prospects or risk-sharing opportunities.”
Regarding his recent meeting with Nvidia CEO Jensen Huang, he said, “We’ve known each other for a long time - he urged us to speed up research and development to bring products to the market more quickly.” The two had this conversation over a meal, according to Chey. SK Hynix supplies fourth-generation HBM chips, the HBM3, to Nvidia. HBM chips are essential components of Nvidia’s graphics processing units (GPUs), which power generative AI systems such as OpenAI’s ChatGPT.
He deemed the recent EV battery sector slowdown as temporary. “This is a result of the Chasm effect caused by fluctuations in EV demand, causing disruptions in the supply chain for batteries and related materials,” he said. “I don’t believe for a moment that this implies the end of EVs - EVs will persist.”
Korea Chamber of Commerce and Industry (KCCI) unanimously reelected Chey as its 25th president in March. Chey will take the helm at the KCCI for three more years, until March 2027.
