[New York = E-Daily Kim Sang-yoon Correspondent] “The AI you’re seeing right now is like a 4- or 5-year-old child.”
SK Group Chairman Choi Tae-won stated at a press conference held on the 10th (local time) in New York to commemorate SK hynix(000660) ’s listing on the Nasdaq, “AI is changing the very structure of the memory semiconductor industry,” and predicted, “Memory demand will continue to increase structurally until AGI (Artificial General Intelligence) is realized.” Explaining the current level of AI, he said, “For AI to reach adulthood ultimately means achieving AGI,” adding, “Until then, AI must continue to learn, and countless applications are bound to emerge.”

◇“Structural Changes Have Already Occurred… Business Cycles Have Changed from the Past”
Chairman Choi assessed that the AI era is not merely creating a temporary growth phase for the memory industry but is fundamentally transforming the structure of the semiconductor industry itself. “It’s difficult to view the industry as moving through the same semiconductor cycles as before,” he said, adding, “Structural changes have already taken place, and business cycles are definitely different from those of the past.”
The semiconductor industry has long been regarded as a quintessential cyclical industry, alternating between booms and busts as supply and demand repeatedly shifted. However, Chairman Choi believes that with the advent of AI, the industry has entered a new phase where memory demand is exploding, and the pace of supply expansion cannot keep up.
“A cycle is ultimately a matter of supply and demand,” he explained, noting, “The basic principle—that an increase in supply leads to a downturn and an increase in demand leads to an upturn—has not disappeared.” However, he emphasized, “Right now, the rate at which demand is growing far exceeds the rate at which we are increasing supply,” adding, “The most significant characteristic at present is that the gap between supply and demand is very large.”
Chairman Choi cited generative AI’s “tokens” and “key-value (KV) caches” as the reasons for the structural increase in memory demand. He explained, “The more AI is used, the more token usage increases dramatically,” adding, “An increase in tokens means that the KV cache, where AI stores previous conversations and computation results, continues to grow.” He continued, “To keep storing this data, memory is ultimately required,” adding, “With the dawn of the AI era, the very structure of memory demand is changing.”
A KV cache is a type of working memory that generative AI uses to store previous conversations and computational results. Chairman Choi explained that as AI usage increases, the size of the KV cache that needs to be stored also grows, which in turn leads to increased demand for memory semiconductors.
Chairman Choi also noted that the revenue model for AI services is already changing. He explained, “In the past, the price of AI services was calculated based on GPU usage time, but now the structure is shifting to one where costs are calculated based on how much KV cache is stored and retrieved.” He added, “AI companies are now letting customers choose whether to keep records stored or delete them,” noting, “This means that memory is becoming a core cost factor for these services.”
He predicted that even with advances in compression or new storage technologies, the upward trend in memory demand would not easily abate. “While HBM is expanding and other storage technologies continue to advance, it will be difficult to stem the trend of the total volume of memory that needs to be stored,” he said, adding, “This trend is likely to continue for quite some time until the era of AGI arrives.”

◇“Semiconductor Market Growing Healthily… Must Expand Supply as Much as Possible”
Chairman Choi emphasized that the biggest challenge of the AI era hinges on how quickly the exploding demand for memory can be met with supply. Sharing his recent experience meeting with major Big Tech and AI companies in California, he said, “The questions customers consistently ask are, ‘How much more memory can we get?’ and ‘How will you increase production to meet demand?’” He added, “The most basic request was to supply more chips by any means necessary.”
He continued, “They aren’t just looking at this year or next year,” explaining, “They are demanding long-term supply plans because they expect AI demand to grow explosively in the future.”
Chairman Choi also cautioned against a scenario where only the AI market grows while the general semiconductor market shrinks. “While the AI sector can easily secure funding and afford expensive memory, traditional industries like consumer electronics and automobiles cannot,” he said. “If supply is concentrated solely on AI and we neglect existing markets, the entire semiconductor market could eventually shrink.” He emphasized, “That is not the outcome we want,” adding, “For the entire semiconductor market to grow healthily, we must expand supply capacity as quickly as possible.”
Referring to competitor Micron’s recent expansion of investments in the U.S., Chairman Choi noted that global memory companies are all moving to expand their production capacity. “Micron has also announced a large-scale investment in the U.S.,” he said. “In the past, they operated production facilities in Japan, Taiwan, and Singapore, but their decision to expand production in the U.S. as well reflects the growing need for market access.”
◇“We’ll Build Factories in the U.S. or Anywhere Else If Conditions Are Right”
In line with this strategy to expand supply, he also mentioned the possibility of building a memory factory in the U.S. Chairman Choi explained, “Building a memory factory requires various conditions, such as power, ultrapure water, and a large site,” adding, “These days, rather than building factories one by one as in the past, we need to develop them in the form of large-scale clusters, so the capacity to supply power and water is more important than anything else.”
He continued, “As long as a location meets those conditions, it doesn’t matter whether it’s the U.S. or any other country in the world,” adding, “Right now, how quickly we can secure supply capacity is more important than which country it is.”
He also took a pragmatic view regarding the U.S. government’s push for manufacturing reshoring policies and its calls for local semiconductor production. “Since the U.S. is implementing policies to revitalize its manufacturing sector, semiconductors will naturally be a target,” he said. “Isn’t it only natural that if we go to the U.S., they say they’ll consider it, and if we go to Japan, they say they’ll consider it as well?”
He continued, “It’s incorrect to interpret the phrase ‘under review’ as meaning we will definitely build a factory in the U.S.,” adding, “It would actually be strange not to even consider it.”
He also noted that demand from U.S. customers is significant. Chairman Choi said, “The U.S. is our largest market, and most of our major customers are based there,” adding, “Customers want supply chain stability, and there are many voices calling for us to establish production facilities in the U.S. as well.”
However, he drew a clear line, stating that investment in the U.S. would not replace investment in South Korea. “Building a factory in the U.S. should not be viewed as a zero-sum game where we reduce or relocate production facilities in South Korea,” he said. “Our largest-scale investments in South Korea will continue, and we believe that even those alone will not be sufficient to meet all future demand.”
He continued, “It is only natural for us to explore our options,” but added, “I want to make it clear that I have never said we will definitely build a factory in the U.S.”

◇“Competition in the AI Era Boils Down to ‘Speed’… We Must Move 10 Times Faster Than in the Past”
Chairman Choi emphasized that the core of competition in the AI era ultimately comes down to “speed.” He said, “We have continued to pursue technological innovation and investment in the past, but now we must move 10 times faster than before,” adding, “The most difficult challenge in the AI era is speed.” He continued, “Simply being good at manufacturing memory semiconductors is not enough,” stressing that “we must make strategic investments much more rapidly to gain greater access to AI technology and secure new technological options.”
To this end, he announced plans to expand AI research and development (R&D) and investment, with a focus on the United States. Chairman Choi said, “We no longer need just memory engineers; we now need far more AI experts,” adding, “AI Investment Corp will play a crucial role in conducting joint R&D with customers and partners and in pursuing new business ventures together.”
“Ultimately, what we need is AI technology,” he said. “We must continue strategic investments to secure the technology we need, and if necessary, pursue joint R&D with customers or partners.” He continued, “We also plan to expand U.S.-based R&D,” explaining, “We can only secure a competitive edge by conducting investment and research together in the places where the largest concentration of AI talent is found.”
However, he noted that a specific investment roadmap has not yet been finalized. “We are still in the process of developing and refining our strategy,” he said. “It is appropriate to disclose details only when we can demonstrate that specific initiatives have yielded results; it is too early to announce plans in advance.”
He expressed strong caution regarding the pursuit by Chinese memory companies. Chairman Choi said, “By the time you feel threatened, it’s already too late,” adding, “The moment you judge that a threat has already materialized, you’ve missed the window to respond.” He continued, “Chinese companies are also creating the conditions to expand capital expenditures as they move out of the red and into the black due to the growth of the AI market, and are gaining recognition for their high corporate value through IPOs.”
He remarked, “The favorable market environment isn’t exclusive to WOORIRO CO., LTD—it’s equally available to Chinese companies,” adding, “Consequently, the pace of competition and technological development is bound to accelerate even further.” He emphasized, “We must continue to expand our AI-related technology portfolio and further advance our memory solutions,” noting, “We must move at a much faster pace than in the past to maintain our competitive edge.”
Regarding the expanding collaboration with Taiwan’s TSMC during the development of HBM4—the next-generation high-bandwidth memory (HBM)—he noted, “SK hynix has now become a significant customer of TSMC.” He explained, “Starting with HBM4, the structure involves producing logic dies at TSMC’s foundry, and the relationship between the two companies is evolving beyond simple collaboration into a crucial customer relationship.”
Chairman Choi also noted that the significance of this Nasdaq listing goes beyond mere fundraising. “Through the ADR listing, we have gained access to global capital markets and have far more opportunities to raise the company’s profile,” he said, adding, “The most significant outcome is that we have secured a diverse range of global investors and financial partners.”
He continued, “We now have the option to offer ADR-based stock options to global talent, including those in the U.S.” He explained, “By connecting with global capital markets, we now have a much more diverse pool of financial partners with whom to discuss future investments, and we have laid the groundwork to pursue investments more flexibly going forward.”
Regarding the price difference between the shares of Onejoon Co., Ltd. in Wonju, South Korea, and the U.S. ADRs, he said, “In a perfect market, the two prices should be the same, but differences can arise depending on market characteristics and investor preferences,” adding, “However, that gap will not last forever.” He went on to emphasize, “A company cannot focus on artificially inflating its stock price; ultimately, running the business well and delivering strong performance is the way to raise both the Wonju and ADR prices.”
◇“We Will Naturally Consider a Stock Split If More Requests Are Made”
Regarding the possibility of a stock split—which has drawn growing interest from retail investors due to the recent rise in the stock price—he said, “If we receive more requests, we will naturally consider a stock split.” However, he drew a line, noting, “I have not yet received a report on this matter from the Chief Financial Officer (CFO),” and clarified, “This does not mean a decision has been made; it simply means we are open to reviewing the possibility.”
Regarding the future of SK Hynix’s stake in Japanese NAND flash manufacturer Kioxia, he stated, “We have not yet made a decision.” He explained, “Kioxia’s stock price has risen significantly, creating momentum, and I understand the company is considering how to translate this into sustainable growth,” adding, “We will decide whether to divest the stake or use it as strategic leverage after further discussion.”