South Korean memory chip maker SK hynix issued a rare statement Wednesday defending the government’s push to ease investment regulations for advanced industries, arguing it is the “golden time” to secure competitiveness in national strategic sectors such as semiconductors.
In its statement posted on its website under the title, “An explanation regarding semiconductor fab investments,” the chipmaker expressed support for allowing holding companies to own only 50 percent, rather than 100 percent of project subsidiaries, enabling the chipmaker to bring in outside capital for large-scale investments.
“Companies have traditionally funded investments through internal cash, borrowing and capital increases. But in an era that demands megascale, long-term projects, these methods alone face clear limitations,” SK hynix said in the statement.
“Excessive reliance on debt can sharply amplify financial strain during economic downturns, undermining the sustainability of continued investment.”
The comments follow the government’s July 18 announcement of plans to relax shareholding rules for holding companies to strengthen competitiveness in semiconductors and other advanced industries.
The proposal would lower the mandatory ownership stake that a holding company’s second-tier subsidiary must have in its third-tier subsidiary to 50 percent, from the current 100 percent.
In the case of SK hynix — a second-tier company of SK — the chipmaker would be able to set up a special purpose company that can attract outside capital for large-scale investments. SK hynix’s largest shareholder is SK Square, which owns 20.07 percent of the company.
Stressing that existing funding methods are no longer sufficient in an environment that requires massive, long-term capital commitments, SK hynix gave the example of its investment for a 33,000-square-meter cleanroom in Yongin in 2019. At the time, the investment stood at about 7.5 trillion won, but the amount climbed to around 20 trillion won for the M15X fab in Cheongju, scheduled to break ground later this year.
Total investment planned for the Yongin cluster, where four advanced fabs are set to begin operations sequentially from the first half of 2027, has also surged to more than 600 trillion won, from an earlier estimate of 120 trillion won.
“The semiconductor industry is cyclical, with investment timing rarely matching profit recovery. Preemptive and continuous investment, however, is required for the companies to avoid falling behind in technology competition,” the memory chip maker said.
SK hynix also cited the example of Intel, which has formed a joint venture with global asset manager Brookfield in a 51:49 ownership split to build a $30 billion semiconductor plant in Chandler, Arizona.
“Such project-based investment structures are already widely used in major economies. In the US, Europe and Japan, chipmakers routinely partner with long-term investors to finance production facilities — a pragmatic model that has enabled large-scale investment in advanced industries,” SK hynix said.
“Easing regulations would help Korean companies compete on equal footing with global rivals such as Intel or TSMC.”
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