Chey Tae-won “Fears of ‘pandemonium’ in next year semiconductor supply… the lifeline is to expand supply and lower prices” - 경향신문
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Chey Tae-won, Chairman of SK Group and Chairman of the Korea Chamber of Commerce and Industry, answers reporters' questions during a press conference at the KCCI Jeju Forum on the 15th. Provided by the Korea Chamber of Commerce and Industry
Chey Tae-won, Chairman of SK Group and Chairman of the Korea Chamber of Commerce and Industry, warned of a severe supply shortage in the artificial intelligence (AI) semiconductor market and stressed the need to expand production capacity quickly. He assessed that stabilizing prices by increasing supply, even if margins are reduced, is the lifeline of the Korean semiconductor industry.
At a press conference during the KCCI Jeju Forum on the 15th in Jeju, Chey predicted that the supply-demand imbalance in the AI semiconductor market next year will reach an extreme. He said, “Demand for AI semiconductors next year is expected to rise 60% to 100% from this year, but global supply will hardly increase, so the supply-demand gap will widen much further than this year,” adding, “If this continues, there are fears of ‘pandemonium’, with enormous turmoil.” He went on to say, “We are already under all-around pressure and lobbying from governments of various countries and global customers.”
He specifically labeled current AI semiconductor prices as “abnormally high.” Chey said, “If the current elevated prices persist, ‘chipflation’ that fuels overall inflation will occur, and the market could ultimately shrink,” adding, “In that case, Korean semiconductors would face significant geopolitical risk, so we must rapidly scale production to increase supply.”
He also discussed concrete strategies regarding U.S. investment pressure and securing production bases around the world. Regarding U.S. Secretary of Commerce Howard Rutnick and the push to build plants in the United States, Chey said, “This has continued since the early Trump administration and is not new,” while explaining, “To respond preemptively to trade pressure and absorb exploding global demand, we are considering building plants in the United States, seeking suitable locations and reviewing various options.”
On the contentious investment in a Honam semiconductor cluster raised in political circles, he reiterated that it was a decision strictly from a corporate perspective. Chey said, “It is a decision made from the standpoint of a company that must prepare the next stage after the Yongin (semiconductor cluster),” and reaffirmed, “Our stance is simple: we will proceed if the core infrastructure needed to run a semiconductor plantelectricity, water, talent, and landis fully in place.” On recently raised power shortage concerns, he noted, “There is still around 50 gigawatts of spare domestic generation capacity, so there will be no aggregate shortfall for the time being, but connecting the systemsuch as substations and transmission networksis a challenge to solve going forward.”
Chey Tae-won, Chairman of SK Group and Chairman of the Korea Chamber of Commerce and Industry, answers reporters' questions during a press conference at the KCCI Jeju Forum on the 15th. Provided by the Korea Chamber of Commerce and Industry
Chey urged a shift to growth-centered institutions, arguing that domestic economic regulations and the tax system are locked in the framework of a past high-growth era and are shutting down companies' growth engines. He warned that current laws and systems are holding back the Korean economy, which has entered a low-growth phase. Chey said, “Our institutions remain stuck in the paradigm of the past high-growth era, extinguishing growth incentives for companies,” and proposed, “We must return the system as quickly as possible to align with growth.” He cited the 52-hour workweek and the tax system as representative areas in need of reform.
He also raised concerns about a potential collapse of the capitalist system. Chey analyzed, “The political axis of democracy and the economic axis of capitalism must turn together to keep balance, but as the economic wheel of growth has stopped, distributive conflict and polarization have intensified.” He further warned that without growth, spending cannot be sustained. Chey said, “The national budget and costs increase every year, but if the growth engine stalls and even semiconductors falter, there will be no resources in Korea to cover this spending,” urging a policy shift by the government.
He also commented on internal management issues. Regarding the SK hynix performance bonus controversy that has spread across industry, Chey said, “This is an exceptional situation that occurred because no one anticipated profits of this magnitude when the system was created,” adding, “Labor and management, together with our members, will put their heads together and resolve it wisely.” He nonetheless set coexistence with stakeholders as a precondition. Chey said, “For members' happiness to be sustainable, it must not infringe on the happiness of stakeholders (shareholders·customers·business partners·local communities and all parties to corporate operations),” adding, “If the current bonus system is judged to infringe on stakeholders' rights and interests, it is time to adjust the system for the sake of sustainability.”
On the possibility of a stock split for SK hynix shares, which the market has raised, he struck a cautious tone. Chey said, “Because linkage procedures with the American Depositary Receipt (ADR) system listed on U.S. exchanges must be considered, nothing has yet been reviewed in detail,” while adding, “If a need arises in the future, we will review it as a policy matter.”
