Amid Korea Fair Trade Commission opposition, SK stresses semiconductor exports and tax contributions to counter easing calls
SK Group emphasized on the 25th that "SK Hynix's export performance is serving as a 'national growth engine,'" highlighting the conglomerate's contribution to the national economy. It particularly stressed that SK Hynix paid 4.3 trillion Korean won in corporate taxes during the first to third quarters of this year and that its market capitalization has reached the 300 trillion won range. The group added, "Under the direct leadership of Chairman Chey Tae-won, SK Group continues to invest and create employment in future growth sectors such as AI, semiconductors, energy, and biotechnology, contributing to the national economy."
The business community reacted to SK's emphasis on "national contribution" with the remark, "A curious timing." This comes as SK Group is locked in a sharp dispute with the Korea Fair Trade Commission (KFTC) over the controversy surrounding the 'one-point relaxation of separation of financial and industrial capital' regulations. President Lee Jae-myung has previously instructed a review of easing these regulations, which he claims hinder large corporations' investments, particularly in large-scale AI projects. Key regulations under discussion include allowing holding companies of large conglomerates to establish investment companies (GPs) under their subsidiaries and directly raise funds for major industries. It is widely believed that SK Group would be the sole beneficiary if these regulations are relaxed. Due to the KFTC's negative stance, the business community interprets SK's emphasis on "national contribution" as a rebuttal. An SK Group spokesperson stated, "This is simply an annual export contribution report; there is no other meaning."
◇SK Highlights SK Hynix's Contribution
Following President Lee Jae-myung's directive, the ruling party has proposed an amendment to the Fair Trade Act to allow subsidiaries of holding companies to establish special-purpose companies (SPCs) for investment in advanced strategic industries. Within and outside the business community, this has drawn reactions that the proposal is "tailored" for SK Group, as SK Hynix is a grandchild company of SK's holding company. SK Group also focused solely on SK Hynix's national contributions in its statement that day, with no mention of other affiliates.
According to SK Group, exports from January to September totaled 87.8 trillion won, of which 65% (56.7 trillion won) came from SK Hynix. The company's corporate tax payments for this year reached 4.3 trillion won, a 45-fold increase compared to the same period last year. SK Group stated, "SK Hynix's exports have played a pivotal role in driving South Korea's total exports to record highs, acting as a 'national growth engine.' Its performance has also injected vitality into the broader economy through tax payments and increased market capitalization."
This success was driven by high-value-added memory semiconductors, particularly high-bandwidth memory (HBM). A source from the business community remarked, "SK Hynix's growth, riding the AI wave, directly translates to national growth, and this is a call to clear investment hurdles for SK Hynix."
This is not the first time SK has rebutted calls for relaxing the separation of financial and industrial capital. On the 20th, Chairman Chey Tae-won stated at a corporate growth forum in Yeouido, Seoul, "What we seek is not the relaxation of the separation of financial and industrial capital. We need methodologies to address the challenge of large-scale AI investments," indirectly refuting the 'one-point relaxation' proposal.
SK also recently promoted several government and parliamentary affairs personnel to prominent roles. A notable example is Jung Jai-hun, the new CEO of SK Telecom, a former judge who previously served as president in charge of external cooperation. SK Group's government affairs division is known to have long engaged in behind-the-scenes efforts to improve institutional frameworks.
However, KFTC Chairman Ju Biung-ghi drew a line against SK's stance that day. On MBC Radio's "Kim Jong-bae's Focus," he emphasized, "The economy still maintains an abnormal structure where conglomerate founding families control 40 to 200 affiliates through an octopus-like expansion into unrelated industries, with succession to second and third generations. The separation of financial and industrial capital principle is necessary to prevent financial institutions and conglomerates from exacerbating issues like concentrated economic power and the expansion of founding families' control." His remarks were interpreted as targeting major corporations, including SK Group.
◇Other Affiliates Face Challenges
Within and outside SK Group, there is widespread recognition that the conglomerate has no choice but to prioritize regulatory easing for SK Hynix. Export data released that day showed that while SK Hynix's exports surged, other affiliates saw a 12% decline, from 35.5 trillion won in the first to third quarters of last year to 31.1 trillion won this year. SK Hynix is the sole growth driver.
Other affiliates continue to grapple with the aftermath of restructuring initiated late last year under Chairman Chey Chang-won of the SK Supex Council. This year's shock from the SK Telecom hacking incident has compounded the challenges. Excluding SK Hynix, major affiliates are undergoing large-scale workforce adjustments, including up to a 30% reduction in executives at SK Telecom. An employee of an SK affiliate remarked, "SK Hynix and other affiliates are practically in different worlds. Executives, team leaders, and project managers are unsure about their future, leaving work stagnant."
Despite the lack of a rebound in major affiliates, SK Group self-assessed, "The heightened national economic contribution of SK Group reflects the success of structural improvements -- business, financial, and governance -- consistently pursued by Chairman Chey Tae-won."
A source from the business community stated, "As SK's reliance on SK Hynix grows without resolving the underperformance of other affiliates like batteries and energy, the group has no choice but to push aggressively for future investments, even if it means confronting the KFTC's opposition."