SK hynix vows to ramp up foundry business

One of the CEOs of SK hynix, the world's second largest memory chip maker, has vowed major investments in the foundry business, or contract chip manufacturing, a major shift in its business structure.

Park Jung-ho, co-CEO of SK hynix, second from right, attends the World IT Show on Wednesday at Coex in southern Seoul. [YONHAP]

One of the CEOs of SK hynix, the world’s second largest memory chip maker, has vowed major investments in the foundry business, or contract chip manufacturing, a major shift in its business structure.

Park Jung-ho, co-CEO of the chipmaker, said Wednesday, “We will have to make more investment into foundry.

“It will provide more opportunities for local fabless companies to develop new technologies if there are foundries offering chip fabrication comparable to TSMC,” he said, referring to the world’s largest contract chip manufacturer, which is based in Taiwan.

Fabless companies design chips but contract out manufacturing.

His comments came as the world wrestles with a scarcity of chips that started in the automobile sector but has spread to consumer electronics goods.

As electronics makers and car manufacturers all turn towards a handful of contract chip manufacturers, the foundries – including TSMC and, on a smaller scale, Samsung Electronics – find themselves incapable of handling the surging orders.

The foundry business accounts for less than 5 percent of SK hynix revenues.

The company runs a foundry service through subsidiary SK Hynix System IC.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]