SK ventures into new areas to achieve ‘Deep Change’
[THE INVESTOR] Since 2016, the growth mantra of SK Group has been “Deep Change,” and this year, the third-largest conglomerate in South Korea is taking it up a notch in newfound areas.
The group is looking into new business models in the fields of semiconductors, oil refinery and information and communication technology in the face of a paradigm shift toward the “fourth industrial revolution.”
SK Group Chairman Chey Tae-won gives a speech at a ceremony marking the start of the new year on Jan. 2 in Seoul. SK
SK Group Chairman Chey Tae-won is spearheading the undertaking by leading talks with global business leaders for new opportunities.
Last month, Chey met with Anthony Tan of ride-hailing platform operator Grab -- Uber’s rival in Southeast Asia -- at the Davos Forum in Switzerland to discuss the visions of such online-to-offline service platforms.
The group’s holding company SK Holdings launched a global car sharing service in Malaysia in January by partnering with Korea’s SoCar, which marked the beginning of SK’s sharing economy and online-to-offline business.
ICT is one of three pillars of SK’s makeover initiative, in which the conglomerate sees an unlimited number of new business opportunities in comparison with the traditional semiconductor and oil businesses.
The group’s mobile carrier SK Telecom is leading the ICT business as it is moving to secure next-generation technologies that would create new value and services.
SKT is focusing on commercializing the fifth-generation telecom network as the industry’s first, and building autonomous driving systems and smart cities.
The company has partnered with navigation software provider Here Technologies, owned by a consortium of German automakers, to work on developing higher-definition maps for self-driving cars.
SKT CEO Park Jung-ho inked the deal with Here CEO Edzard Overbeek during the Consumer Electronics Show in January.
SKT is the first mobile carrier to work with Here since it was chosen to provide 5G technologies that are essential to providing a seamless communications network for autonomous vehicles.
The telecom unit is also creating a music platform by using artificial intelligence, the 5G network and blockchain technologies in partnership with leading K-pop agencies, as part of the firm’s new ICT business this year.
The group is making new attempts in the conventional chipmaking and oil refinery businesses, too.
SK hynix, the world’s third-largest memory chip provider, will start supplying 72-layer 3-D NAND Flash chips for enterprise solid state drives, one of the highest value-added markets for the chipmaker, from this year.
Bolstered by its record-high earnings last year -- with annual net income surpassing 10 trillion won ($9.4 billion) for the first time -- the chipset maker is planning to expand mass production of DRAMs on the cutting-edge 10-nanometer class process and 72-layer NAND chips.
SK Innovation, which was launched as a refiner, is evolving as an energy and chemical firm by nurturing the next-generation battery and information display material businesses.
Its operating profit from nonrefinery businesses exceeded 2 trillion won for the first time last year.
The acquisition of Dow Chemical’s EAA and PVDC units in 2017 was considered a significant achievement to move forward as a global chemical business.
The company is aggressively investing in its lithium-ion battery business as well, in order to increase its market share by expanding production facilities in Seosan, South Chungcheong Province, and building a new factory in Hungary.
Chairman Chey emphasized urgency for “deep change” in his New Year’s address on Jan. 2.
“Despite whopping two-hundredfold growth in the group’s profit for the past 20 years, we are still being complacent with ‘old businesses,’” Chey said. “In an era of ‘sudden death’ full of uncertainties about survival, we are in critical need for ‘deep change’ for our sustainable growth.”
By Song Su-hyun/The Korea Herald (firstname.lastname@example.org)