Chipmaker argues current fair trade framework no longer matches the scale and risk of AI-era semiconductor investment
SK hynix has urged the South Korean government to relax fair trade regulations, saying existing ownership rules make it harder to finance the large and long-term investments required to compete in the artificial intelligence semiconductor market. The company said greater flexibility would allow it to establish special purpose companies with outside investors to raise capital for AI-driven expansion.
The request highlights the limits imposed by SK hynix’s position within SK Group’s corporate structure. As a second-tier affiliate controlled through intermediate holding company SK Square, SK hynix is currently required to maintain 100% ownership when setting up a third-tier subsidiary. The company argues this rule restricts its ability to attract external capital at a time when investment needs are rising rapidly.
Government Signals Openness to Change
The appeal comes as the government earlier this month said it would consider lowering the ownership requirement for second-tier subsidiaries to 50%. The proposal is part of broader efforts to give semiconductor companies more room to raise funds as global competition in AI-related technologies intensifies.
The discussion reflects a wider policy debate over whether South Korea’s long-standing fair trade and governance framework can keep pace with the capital demands of strategic industries such as semiconductors.
SK hynix: Investment Reality Has Shifted
In a rare public statement posted on its website, SK hynix said the scale and structure of investment have fundamentally changed in the AI era.
“Amid the intensifying competition for cutting-edge technologies, the volume and methods of investment have totally changed from the past,” the company said.
It added that regulatory reform should be approached from an industry-wide perspective rather than focusing on individual firms.
“Discussions on improving investment-related regulations should not center on a specific company or case, but on how investment in advanced industries can continue in a fast-changing environment,” it said.
Rising Costs Highlight Regulatory Gap
To illustrate the mismatch between regulation and investment needs, SK hynix pointed to the sharp rise in construction costs for advanced semiconductor facilities:
- In 2019, building a 33,000-square-meter clean room for the Yongin semiconductor cluster was estimated at 7.5 trillion won
- By 2025, the cost of a similar facility at the company’s M15X fabrication plant had risen to about 20 trillion won
The company said such “super-sized” projects are increasingly difficult to finance through traditional methods, particularly given long construction timelines and delayed returns.
Case for Special Purpose Companies
SK hynix said that permitting second-tier subsidiaries to form special purpose entities with outside investors would reduce funding strain and strengthen financial stability. The company added that this approach would allow risks to be shared while supporting sustained investment in advanced manufacturing.
“Considering the semiconductor industry’s high volatility, this kind of flexibility plays a critical role in sustaining investment and maintaining competitiveness,” SK hynix said.
Broader Policy Implications
The debate underscores growing tension between South Korea’s corporate governance rules and the realities of the global AI and semiconductor race. As chipmaking becomes more capital-intensive and strategically important, policymakers face pressure to decide how far regulations should evolve to support national champions—without undermining fair trade principles.
How the government balances these priorities could shape the investment landscape for South Korea’s semiconductor industry in the years ahead.
