SK Chairman Presses Kioxia for Deeper Ties, Threatens Exit

The rapid expansion of generative AI and large language models has sharply increased demand for AI hardware such as high-bandwidth memory, making South Korea’s SK hynix a key player in the global semiconductor supply chain. SK Group Chairman Chey Tae-won is bullish on the trend. He said South Korea can preserve its long-term export advantage and avoid direct exposure to U.S.-China geopolitical competition by combining memory and computing power to export services for niche AI markets.

SK hynix shares suffered their biggest decline on record on July 13, 2026, plunging 15% in a single day as investors took profits and leveraged retail positions were liquidated. In public remarks on July 17, Chey urged investors to “just leave good stocks alone.” He said the AI industry’s demand for memory would grow exponentially and remained firmly bullish on SK hynix’s long-term upward trajectory and transformation prospects.

Kioxia, formerly Toshiba Memory, is one of the world’s leading NAND flash-memory makers. SK Hynix decided on Sept. 27, 2017, to join a Bain Capital-led consortium and completed the acquisition in 2018. The consortium’s deal was valued at about 2 trillion yen, with SK Hynix contributing 395 billion yen. The investment has also become a key case study in how AI-driven storage demand can revalue memory assets.

As of June 17, 2026, Kioxia’s shares had risen more than 50-fold since its Tokyo listing in late 2024, lifting its market capitalization above 51 trillion yen, largely as AI data centers boosted demand for NAND and storage. SK Hynix holds a stake of more than 7% through the consortium and owns convertible bonds equivalent to another 15% stake that can be converted in 2028. Based on Kioxia’s market value at the time, SK Hynix’s remaining interests were worth 7.9 trillion yen, or about $49.2 billion, implying a potential return of roughly 19 times its investment.

Generative AI and data-center expansion are driving demand for high-bandwidth memory, with tight supply making SK Hynix a critical supplier. Microsoft, Meta and Alphabet had offered a combined investment of about $10 billion to secure chipmaking capacity, underscoring how technology giants are intervening directly in upstream expansion and supply-chain planning.

As of July 20, 2026, SK Hynix had rejected the technology giants' $10 billion investment proposal and turned it into leverage in supply negotiations. The company is negotiating long-term supply agreements and is also considering asking customers for advance payments to share the cost of EUV equipment and capacity expansion. Related reports have not disclosed a formal signing date or each company's proposed share of the investment.