SK seeks ‘deep change’ for overseas expansion, growth

SK Group, the second-largest conglomerate by asset, has relied more on domestic demand through its cash cow units including SK Telecom, the nation’s largest telecom giant, and SK Innovation, a leading energy firm.

But in recent years the group has been seeking overseas expansion, acknowledging its limit of being a major player in the domestic market. And for SK, future technologies from cloud computing to electric vehicles are the keys for its growth at home and abroad.

The group has been seeking for innovative ideas and new business opportunities in the era of the “fourth industrial revolution.” Declaring the new vision “Deep Change,” SK Group Chairman Chey Tae-won has been urging the members of SK affiliates to shift their way of thinking to seek new business models by converging different sectors.
 

“In the era of the fourth industrial revolution, different business models and technologies, if converged, can produce new values and bigger assets that we have not thought about before,” said Chey during a management meeting in June.

The Deep Change movement includes a large investment into new fields.

SK Telecom, the group’s main pillar, plans to invest 11 trillion won on artificial intelligence and 5G networks by 2019, believing that such investment would create new ICT ecosystem, which encompasses autonomous driving, connected cars, artificial intelligence, big data, smart homes, energy management, media and global content.

SK Telecom’s NUGU, the first-voice activated AI device, is one of the latest products that converged the company’s network service with voice recognition technology. The company has been pushing ahead with commercializing 5G network, said to be the basis of the fourth industrial revolution. The company has joined a global alliance of network service providers including AT&T, Deutch Telecom and Ericsson to set up a universal standard for the super-fast mobile network. The mobile operator has also partnered with BMW Korea, a local distributor of the German carmaker, in connected car technology, while jointly developing a high definition navigation app with Nvidia, a US-based chipmaker.

A recent landmark deal, for which SK hynix has taken part in, to acquire Toshiba is widely seen as an opportunity to further expand its already thriving chip business.

Toshiba is the second largest NAND provider in the world after Samsung Electronics which holds a 37 percent share in the market. SK hynix is fifth with 9.6 percent.

As part of industrial convergence, SK C&C, an IT unit merged with SK Holdings, has adopted an AI system based on IBM’s Watson for Oncology for the diagnosis and treatment of cancer.

The AI software will assist doctors to find optimal treatment for a patient based on his or her personal information and medical records. In cooperation with Korea University, SK has kicked off a project to reduce the usage of antibiotics by using Aibril, the firm’s big data and cloud commuting platform powered by IBM’s AI software. The AI service will be expanded to fields of entertainment, finance and personal assistance, the company said.
 

SK has been making inroads into biopharmaceutical industry, pinning hopes for the fast-growing field.

SK Chemicals, the chemical and pharmaceutical arm of the group, won market approvals for its hemophilia drug, from health authorities in US, Europe, Canada and Australia. SK Biopharmaceuticals, the group’s new drug developing unit, is preparing for commercialization approval of its self-developed epilepsy treatment in the US, which the company expects to secure more than 1 trillion won of revenue just in the US market if approved. Another SK Holding’s subsidiary and a CMO, SK Biotek, has also acquired a manufacturing facility in Ireland from Bristol-Myers Squibb, in June, expanding its presence in Europe.

Innovation is also under way from the group’s energy unit as it has reorganized its offices to push forward the company’s new portfolio of battery and chemical businesses. The company plans to spend 10 trillion won in the battery and other nonrefining sectors by 2020. The investment will help the company solidify its market position as a leader in energy and chemical segments in the world, the company said.

By Cho Chung-un (christory@heraldcorp.com)