SK Hynix, the second-largest semiconductor manufacturer in South Korea, has announced a massive investment of $74.6 billion to bolster its artificial intelligence (AI) capabilities by 2028. This strategic move is part of a broader plan by SK Group, the parent company, to secure 80 trillion won (approximately $57.9 billion) by 2026 to accelerate its focus on chips and AI.

The investment will primarily target the development of AI-focused memory chips, including high-bandwidth memory (HBM), a growing area where SK Hynix has established an early advantage. Additionally, SK Telecom and SK Broadband, subsidiaries of SK Group, will invest a combined 3.4 trillion won ($2.5 billion) in the data center business over the next five years to support the AI infrastructure.

This ambitious investment plan comes at a time when SK Group has faced heavy losses in its chipmaking and electric vehicle battery divisions. The company's leadership, led by Chairman Chey Tae-won, recognizes the need for a "preemptive and fundamental change" to regain its competitive edge in the global semiconductor market.

The move also reflects the growing importance of AI technology across various industries. SK Group aims to consolidate its position in the AI value chain, from chips and data centers to AI services, to secure its global competitiveness amid fierce competition from tech giants like Google, Microsoft, and Nvidia.

To achieve this, SK Group plans to streamline its operations by reducing the number of subsidiaries from the current "more than 175" to a more manageable figure. This strategic restructuring is expected to improve the company's profitability and operational efficiency.

The investment in AI technology is a bold step by SK Group, as it seeks to turn a profit of around $16 billion in 2024 and reach a target of $30 billion in earnings before tax by 2026. The company's commitment to this transformative shift underscores the growing significance of AI in the global technology landscape.