SK Group has concluded its three-year business restructuring and is accelerating its transition towards a focus on artificial intelligence, semiconductors, and energy. In the upcoming 2027 executive appointments, most CEOs of major affiliates will remain in their positions, emphasizing stability over change, while practical leaders will be appointed for the power, semiconductor, and overseas businesses. This strategy aims to concentrate resources freed up from divesting non-core businesses on the three growth pillars proposed by Chairman Chey Tae-won.
On October 30, SK Group held a meeting of its decision-making body, the Supex Council, to share the executive appointments for 2027 decided by the boards of its member companies.
The key aspect of this appointment is the 'early termination' of the restructuring process. The group plans to halt the sale and consolidation of non-core assets and instead focus on enhancing the core competitiveness of its affiliates and investing in future growth areas.
The results of SK Group's restructuring can be quantified. Over the past three years, the number of SK affiliates has decreased from 219 to 151, a reduction of 68. This has led to an asset efficiency improvement of approximately 13 trillion won. The standalone net debt of the holding company, SK Inc., has decreased from 10.526 trillion won at the end of 2024 to 8.520 trillion won by the end of June this year, a reduction of over 2 trillion won. The debt dependency ratio has also fallen from 40.5% to 31.8%.
The most recent example of restructuring is SK Siltron. In July, SK Inc. decided to sell 70.6% of its stake in SK Siltron to Doosan. Additionally, the renewable energy businesses scattered across affiliates will be consolidated into a new entity created in partnership with global private equity firm KKR (SK Inc. 49%, KKR 51%), which is set to launch by the end of this year.
An industry insider commented on SK Group's restructuring direction, stating, "Energy is being consolidated while AI is being decentralized." The energy sector saw the merger of SK Innovation and SK E&S in November 2024, while SK On has absorbed SK Trading International, SK Entum, and SK Enmove.
Conversely, in the AI sector, SK Telecom launched AI DC development company SK Hyper in August and the data center and submarine cable business SK Horizon in September. The decision to spin off the AI business is seen as a move to attract significant external funding. Indeed, SK Horizon has secured an investment of 3.8 trillion won from KKR and others.
Chairman Chey Tae-won, who champions AI and semiconductors, predicts a significant expansion of the AI era starting in 2027 and is pushing for substantial investments in AI, semiconductors, and the energy sector that supports both. For instance, in June, he outlined a long-term investment plan totaling 2,100 trillion won, with 1,000 trillion won allocated for AI DC and 1,100 trillion won for semiconductors. This ambitious plan is made possible by the financial strength gained through restructuring.
Semiconductors serve as the group's cash cow and growth engine. SK Hynix achieved record sales of 104.6155 trillion won and operating profit of 83.3338 trillion won (operating profit margin of 80%) in the third quarter of this year. More than 50% of its production capacity for 2027-2028 has already been secured through long-term supply contracts (LTA), and the first phase of the Yongin semiconductor cluster will begin operations next year, expanding production capacity.
In the recent executive appointments, SK Hynix established a new Americas division and appointed President Ahn Hyun, who has led the development of high-bandwidth memory (HBM). The goal is to enhance responses to big tech clients and strengthen local research and development (R&D). In the vacant position, Choi Sun-yong, head of the Future Technology Research Institute, has been placed to accelerate the development of next-generation products.
The AI infrastructure will be led by SK Telecom and its affiliates. There are no significant changes in the recent executive appointments to ensure the AI DC project, initiated last year, gains momentum. The top priority is to operationalize the Ulsan AI DC, which is co-managed with Amazon Web Services (AWS), by the second half of 2027.
In the energy sector, efforts will focus on LNG private power generation to support the AI DC. Jeong Seung-il, who has been appointed as the new CEO of SK Innovation, is an energy policy expert who previously served as vice minister of the Ministry of Trade, Industry and Energy and president of Korea Gas Corporation and Korea Electric Power Corporation. He was recruited as president in June to address power supply issues for semiconductors and data centers. Since Chairman Chey has identified power as a bottleneck for the AI industry, initiating new power projects will be his task.
SK Discovery has appointed Yoon Byeong-seok, president of SK Gas, while SK Gas has appointed Song Kyung-yeol, head of the strategy division, as new representatives. The plan is to secure LNG reliably and provide stable electricity to the AI DC through private power generation.
The holding company and control tower have also been restructured to focus on execution. SK Inc. has promoted Kim Sun-hyuk, head of the strategy division at SKC, to president, assigning him to oversee operational improvements and performance management across affiliates. Kwon Young-soo, head of the strategy division at SK Innovation, has been appointed as president of the Supex Council to ensure synergy among group companies. In addition to the existing Americas, China, and Japan divisions, a new Southeast Asia division has been established, with President Choo Hyung-wook appointed to lead localization efforts in AI, eco-friendly, and advanced materials businesses.
Following the executive appointments next year, SK Group is expected to detail its 2027 business strategy at a CEO seminar next month, attended by Chairman Chey Tae-won and Vice Chairman Chey Chang-won. An industry insider remarked, "Having completed the 'downsizing' through restructuring, SK Group is now entering a phase where it will be evaluated based on its achievements in securing global AI and semiconductor clients and winning power projects."
* This article has been translated by AI.
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