SK to invest almost $50B outside Korea's capital area over 5 years

SK companies will invest 67 trillion won ($49.8 billion) in the non-capital area over five years to build manufacturing facilities for chips, electric vehicle batteries, biopharmaceuticals and hydrogen, SK announced Wednesday.

SK siltron's wafer factory in Gumi, North Gyeongsang [SK siltron]

SK companies will invest 67 trillion won ($49.8 billion) in the non-capital area over five years to build manufacturing facilities for chips, electric vehicle batteries, biopharmaceuticals and hydrogen, SK announced Wednesday.

The funding is committed to all regions within the country excluding Seoul, Gyeonggi and Incheon, where its major industrial complexes and offices are already located.

SK explained that the latest decision is intended to spread out its resources and infrastructure from the capital area, in which about half of the country’s population, or 26 million people, are living.

The plan is a part of SK’s five-year investment plan worth 179 trillion won in Korea, which was announced in May.

Of the planned investment, 73 trillion won will be spent this year through next year “to pre-emptively respond to economic uncertainties and geopolitical risks,” with a separate 25 trillion won to be reserved for research and development, according to SK.

Five trillion won of next year's budget has been earmarked to SK Telecom and SK Broadband in building more 5G network architecture across the country through next year.

Another 1 trillion won will be used by SK E&S to construct plants to produce solar and wind energy.

SK E&S will also spend 5 trillion won to build a production site for green and blue hydrogen in Boryeong, South Chungcheong.

Green hydrogen is generated from renewable energy, while blue hydrogen is made from natural gas and generates carbon dioxide in the production process, which is captured and stored in the ground.

SK siltron, a wafer supplier to SK hynix and Samsung Electronics, will inject 1 trillion won to build a wafer manufacturing plant at Gumi, North Gyeongsang, by 2025.

The wafer maker will ramp up the capacity of its existing wafer plant in Gumi by investing 190 billion won through 2024. The expanded line will start to produce wafers based on silicon carbide in November.

Compared to those made up entirely of silicon, silicon carbide-based semiconductors deliver superior power switch performance in harsh environments, such as in hot temperatures or when dealing with high voltages.

SK allotted 1 trillion won to SK Materials to build or expand manufacturing facilities for EV battery materials and specialty gases.

SK hynix’s decision to build a new chip factory in Cheongju, North Chungcheong, with 15 trillion won of investment aligns with its intention to balance capital expenditure in the non-capital area, SK said.

SK companies say they will hire at least 13,000 more employees this year, a record high and up 50 percent from the previous year.

“Korea is a central point of manufacturing semiconductors, batteries and bio products, which constitutes key businesses of SK,” a spokesperson at SK said.

“SK will continue to make large-scale investments into the sectors to ramp up production and take the lead in the global market.”

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