[Exclusive] SK Telecom plans M&A, foray into nonmemory chip market: CEO

SK Telecom, South Korea’s No. 1 mobile carrier, aims to grow into a global key player in nonmemory chip design and is on the lookout for acquisition targets, its chief executive officer said Wednesday.

Speaking exclusively to The Korea Herald, SKT CEO Park Jung-ho said, “SK Telecom will take the lead in development of nonmemory chips, helping SK hynix (expand into the overall semiconductor market).”

The SKT chief doubles as vice chairman of SK hynix, the world’s third-largest DRAM producer, in which SKT holds the largest stake of 20.1 percent.

The two SK companies will collaborate for a foray into the burgeoning system-on-chip market, Park said at the World IT Show 2021 held at Coex in southern Seoul.

“SK Telecom has a sufficient workforce for system chip development,” he stressed.

“We will bring some workers from SK hynix and work together to develop nonmemory chips.”

Seeking a new growth engine outside the saturated mobile network market, SKT has been studying the chip business for some time. At Wednesday’s event, the firm showcased its artificial intelligence chip, “Sapeon.”

Completed in December, the AI chip is solely designed by SKT and manufactured by Taiwan Semiconductor Manufacturing Co. on a 14-nanometer process. The core chipset, with an algorithm for inference, helps humans make better decisions thanks to the artificial intelligence’s inference capabilities based on big data.

SKT‘s research and development arm T3K created a team focusing on AI chips in 2017, naming it “AI Accelerator.”

The company has declined to reveal the size of the organization. In 2019, Park said the team was working on the development of the chipset and is now preparing it for commercialization.

“It would take some time for commercialization of AI chipsets, considering foundry capabilities,” Park added. “But we are going toward that direction.”

On the question of why SKT had chosen TSMC over Samsung Electronics, Park mentioned the domestic foundry market and the company’s willingness to invest in it.

“Many domestic fabless firms say they need more foundry services here, like TSMC’s,” he said. “I think we should make an investment in foundries to support local fabless firms to grow further.”

Last week, SKT announced its final plan for governance restructuring.

It will establish an intermediate holding company, tentatively named ICT Investment, while spinning off the telecom unit.

Park has been tapped as the inaugural chief of the new holding firm, which will be the parent company of chipmaker SK hynix.

The primary purpose of creating the holding firm is to actively carry out investments, especially in the semiconductor business, the company said.

“We are looking for targets for mergers and acquisitions in the fields of AI semiconductors to auto chips,” Park said.

The World IT Show is an annual exhibition hosted by the Ministry of Science and ICT. This year, a total of 305 domestic and foreign tech companies participated in the exhibition to showcase their latest technologies and solutions under the main theme of “Unfolding the Digital New Deal With 5G.”

By Song Su-hyun (song@heraldcorp.com)