SK’s Chey Says Joint Production With Japan’s Kioxia Is an Option, Signals Exit if Cooperation Fails

Investment Plan May Be Announced This Year

Signals Stake Disposal if Partnership Falls Through

SK Group Chairman Chey Tae-won said joint production with Japan’s Kioxia is one option under review, including the possibility of building a plant in Japan. The move would make Japan a key overseas manufacturing base with Kioxia, in which SK Hynix has an indirect investment, as the spread of generative artificial intelligence worsens a global shortage of memory chips.

Chey made the remarks in an interview published by the Asahi Shimbun on September 2. He said Kioxia “is a company with many strengths” and that cooperation could extend beyond joint production to research and development, or R&D, and supply-chain sharing. Referring to Kioxia’s production structure with U.S. company SanDisk, Chey added that SK Hynix is ready to become a partner at any time if it can be part of Kioxia’s future strategy. He also indicated that jointly building a plant is a possible option.

Chey’s push for Japan is driven by an AI-led memory shortage. He said memory for data centers is currently 20% to 30% short, and judged that expanding domestic production lines alone would not be enough to meet rapidly rising demand. He cited Japan’s dense ecosystem for materials, parts and equipment, along with its strong manufacturing base, as key attractions. Chey also said multiple Japanese local governments have approached the company about hosting a plant and signaled that a more detailed investment plan could be presented within the year.

A tie-up between the two companies would reshape the global NAND market. Counterpoint Research said second-quarter market share was 25% for Samsung Electronics, 22% for SK Hynix and 14% for Kioxia. Combined, SK Hynix and Kioxia would hold 36% of the market, enough to surpass Samsung and become the world’s largest player.

Investors see SK Hynix’s Kioxia stake as the key variable in the talks. SK Hynix holds about 129 billion yen ($877 million) of Kioxia convertible bonds. If those bonds are converted into common shares, SK Hynix would directly secure about a 15% stake in Kioxia and become a de facto major shareholder. Still, antitrust reviews in multiple jurisdictions, an agreement capping voting shares at 15% through 2028, and resistance from the Japanese government remain hurdles.

Chey also said he is prepared to unwind the investment if cooperation proves impossible. “If we can no longer build a cooperative relationship, we will end the investment,” he said.

Kim Chae-yeon / Tokyo=Choi Man-su, correspondent why29@hankyung.com