SK Hynix (Vice Chairman Park Jung-ho) and SK Square (CEO Park Sung-ha) are beginning to invest in overseas semiconductor small and medium-sized enterprises (SMEs), and are considering a high-end Japanese company, a leader in the SMEs sector, as their first strategic investment destination.

SK Hynix and SK Square announced on the 4th that they will jointly invest approximately 100 billion won with major domestic financial institutions and invest in promising overseas semiconductor small and medium-sized enterprises (materials, parts, and equipment) in Japan, the United States, and other countries.

SK Square established TGC SQUARE, an investment corporation, to facilitate efficient overseas semiconductor investment. SK Hynix, Shinhan Financial Group, and LIG Nex1 are participating in the joint investment.

The joint venture companies aim to expand their investment portfolio into the semiconductor sector by joining forces with SK Square and SK Hynix, both of which possess deep insights into the semiconductor industry. Starting with this KRW 100 billion investment, the investment firm is open to additional joint investment opportunities for companies seeking additional participation.

SK Square and SK Hynix plan to build a stable global semiconductor supply chain and strengthen their cutting-edge technological competitiveness by preemptively investing in semiconductor small and medium-sized enterprises with unrivaled technological capabilities.

The global semiconductor supply chain is rapidly being reorganized as each country strives to create a competitive, home-based ecosystem. Therefore, to strengthen the semiconductor value chain, cooperation with small and medium-sized enterprises with technological advantages in semiconductor design, production, and packaging processes is essential.

TGC SQUARE Corporation has established a professional investment review system by operating a 'Semiconductor Advisory Committee' in which experts from global top-tier semiconductor companies provide technical insights.

Choi Woo-sung, the current Managing Director (MD) of SK Square Semiconductor and CEO of SK Telecom Japan, will serve as CEO of the investment corporation.

Additionally, former BNP Paribas Japan sales manager Cho Hee-jun was appointed as CIO (Chief Investment Officer), and former Credit Suisse Vice President Miyamoto Yasuteru was appointed as a specialist reviewer.

TGC SQUARE Corporation plans to maximize mutual synergy by actively utilizing overseas investment bases operated by SK ICT affiliates, early identifying overseas companies with superior technological capabilities from the deal sourcing and technology verification stages, and reviewing joint investments.

SK ICT affiliates currently operate several investment corporations in Japan and the United States, including SK Telecom Japan (Tokyo, Japan), SK Hynix Ventures (San Jose, USA), SK Square America (New York, USA), and SK Telecom America (Santa Clara, USA).

SK Square and SK Hynix are considering a Japanese semiconductor powerhouse as their first investment target. They plan to invest approximately 60% of the funds raised in Japanese small and medium-sized enterprises (SMEs).

Japan is considered a global leader in semiconductor manufacturing. In fact, Japan is home to many of the world's top 1 and 2 companies specializing in high-end, irreplaceable technologies across all areas of semiconductor materials, components, and equipment, with a combined global market share of around 30%.

SK Square and SK Hynix will operate a Japanese semiconductor investment network and conduct technology verification centered on potential investment target companies, including inspection equipment developer Company A, eco-friendly semiconductor parts manufacturer Company B, AI semiconductor developer Company C, and next-generation semiconductor material developer Company D.

SK Square and SK Hynix share a vision of implementing various value-up measures to enhance corporate value after investing in growth companies. For example, they are exploring ways to expand SK Hynix's network-based business and technology collaboration and support future mergers and acquisitions (M&A) and initial public offerings (IPOs).

As the two companies proceed with their investments, the domestic and international investment environment for the Japanese semiconductor industry is becoming more favorable than ever, and thus, a positive correlation is expected.

Since the Japanese government announced its strategy to foster the semiconductor industry, the country has attracted nearly 2 trillion yen in overseas investment from global semiconductor companies, including Taiwan's TSMC and the US's Micron, and is emerging as a global semiconductor production hub. According to an industry report, investment in Japanese semiconductor ventures has also increased more than fivefold over the past eight years, reaching 780.1 billion yen in 2021.

SK Square and SK Hynix plan to actively discover and invest in overseas semiconductor small and medium-sized enterprises (SMEs) in Japan and other countries, including the United States, with the goal of strengthening the global semiconductor value chain. In addition, separate from this overseas investment plan, we plan to continue our domestic semiconductor investment.

Choi Woo-sung, CEO of TGC SQUARE, said, “This is a meaningful project that expands the domestic and international semiconductor industry ecosystem through overseas joint investment by major SK affiliates with global semiconductor insights and leading domestic financial institutions,” and “By expanding cooperation with leading global small and medium-sized enterprises, it will serve as an opportunity to lay the foundation for future semiconductor technology.”

LIG Nex1, a joint venture, will also serve as a board member of TGC SQUARE. LIG Nex1 has announced its vision to create new growth engines in the civilian sector by discovering and forming partnerships with leading semiconductor companies.