Lee Gyu-lee is a business writer at The Korea Times, focusing primarily on IT & telecommunications, the Ministry of Trade, Industry and Energy and KOTRA. Prior to this, she has covered a wide range of cultural news, from film, television and K-pop to lifestyle and fashion.
SK Group's portfolio rebalancing gains momentum
A photo of SK Materials' office in Yeongju, North Gyeongsang Province / Courtesy of SK Materials
By Lee Gyu-lee
SK Group is accelerating its portfolio rebalancing with the latest move to merge its subsidiaries as part of its ongoing effort to eliminate overlapping business and direct its focus on future technology such as semiconductor and artificial intelligence (AI).
The group's holding firm SK Inc. said Tuesday that its board has approved transferring SK Materials’ four semiconductor subsidiaries to SK Ecoplant and selling SK C&C’s Pangyo data center in Seongnam, Gyeonggi Province, to SK Broadband.
Under the decision, the holding firm will contribute its shares of the three SK Materials subsidiaries — SK Trichem, SK Resonac and SK Materials JNC — to SK Ecoplant. SK Inc. will also hand over its control of SK Materials Performance to SK Ecoplant through share exchange.
Following the transactions, SK Ecoplant will add four more semiconductor-related subsidiaries, standing as a semiconductor material specialist. Last year, it acquired Essencore, which manufactures DRAM modules, USB and MicroSD and SK Materials Airplus, which provides industrial gas for SK hynix’s chip manufacturing, from the holding firm.
SK Broadband's AI Data Center in Guro District, Seoul / Courtesy of SK Broadband
The board has also approved SK Broadband to acquire SK C&C's Pangyo data center, which has a power capacity of 30 megawatts, for approximately 500 billion won ($351 million). With the new addition, SK Broadband will now have a total of nine data centers to utilize in strengthening its business in response to the growing demand for AI and cloud technology.
The move is interpreted as the group’s strategy to cluster its semiconductor and AI infrastructure businesses from SK Materials and SK C&C to SK Ecoplant and SK Broadband respectively.
"Since the subsidiaries’ performance directly affects the value of the parent company, we aim to boldly merge overlapping businesses and bring out synergy to enhance the value of subsidiaries’ shares, while increasing the overall corporate value," the group said.
On the same day, SK C&C, the group’s digital solution subsidiary, announced it would change its name to SK AX, in its effort to turn the company into an AI-centered tech firm.
The name change, which will take effect from June 1, is part of the group’s plan to redefine its business framework to implement AI throughout the company.
"The name change is us declaring that SK AX itself will reinvent us as Korea's best AI innovation company," SK AX CEO Yoon Poong-young said. "It clearly shows SK AX’s goal to become an AI innovation service provider that solves customers' pain points with AI and the latest technology, and supports businesses to secure their competitiveness."
Under its initiative, the company will restructure its work methods, organization and systems to adopt AI technology, aiming to improve productivity by over 30 percent by 2027.
The company will also work with SK Telecom and SK Broadband to construct the high-performance graphics processing unit-based AI data centers. It also plans to expand into global markets, providing tailored solutions for AI-based manufacturing and energy management to manufacturing companies in Europe and North America.