[Alpha Biz= Reporter Lee Joonhyun] SK Holdings Co., Ltd., the holding company of South Korea’s SK Group, has come under scrutiny amid allegations that it invested a substantial amount of capital to acquire a power semiconductor company lacking core technological capabilities.

The controversy is drawing particular attention as the acquisition was carried out directly by the group’s holding company, rather than by one of its specialized investment arms, raising questions over the rationale behind the decision.

According to an investigation by AlphaBiz published on the 16th, SK Key Foundry participated last month in a KRW 44.3 billion paid-in capital increase by its subsidiary SK Powertech. However, industry sources indicate that securing commercially viable yields for next-generation silicon carbide (SiC) power semiconductors remains uncertain.

SK Powertech was acquired in 2022 by SK Holdings for approximately KRW 120 billion as part of the group’s push into the next-generation strategic semiconductor market.

 

 

An industry source familiar with internal conditions at SK’s semiconductor operations said, “As of last year, SK Powertech’s yield reportedly remained below 30%, making mass production infeasible,” adding that “senior executives at SK Powertech are understood to be struggling to find ways to improve yields.”

In response, SK Key Foundry stated that “SK Powertech is not currently mass-producing SiC semiconductors,” and argued that “claims of production yields below 30% are unfounded.”

Despite the controversy, SK Key Foundry has announced plans to enter the power semiconductor market in the first half of next year in a foundry business model, aligning with the Lee Jae-myung administration’s designation of power semiconductors as a future growth engine.

Nonetheless, SK Group appears to have maintained confidence that SK Powertech possessed the necessary technology. Internal materials distributed during the tenure of former SK Holdings CEO Jang Dong-hyun described SK Powertech as a company with in-house capabilities spanning SiC semiconductor design through manufacturing.

Yoon Yong-pil, an adjunct professor at Hankuk University of Foreign Studies, commented, “In the semiconductor industry, a yield of at least 50% is generally regarded as the threshold for mass production. If yields remain in the 20% range, it would be fair to say that core technological capabilities have yet to be secured.”

Yoon added, “SK Holdings, which led the acquisition of SK Powertech, is effectively a company in which Chairman Chey Tae-won serves as both a registered executive and the largest shareholder. It is inevitable that questions will arise as to why the holding company—rather than investment arm SK Square—acquired a company allegedly lacking technological competitiveness.”

SK Group stated that it was “not in a position to provide details or explanations regarding the acquisition of SK Powertech.”

Jang Dong-hyun, who is believed to have played a key role in leading the acquisition during his tenure as CEO of SK Holdings, has since moved to SK ecoplant as Vice Chairman. Jang is widely regarded as a close confidant of Chairman Chey, having spent more than 35 years at SK Group.

AlphaBiz reported that it made multiple inquiries to Vice Chairman Jang regarding whether sufficient due diligence—particularly on technological capabilities—was conducted at the time of the acquisition, but received no substantive response.

Han Chi-ho, an economist and public administration scholar, noted, “This controversy has surfaced shortly after the Supreme Court recently acquitted Chairman Chey in the long-running SK Siltron private benefit allegations. Against that backdrop, renewed questions surrounding the SK Powertech acquisition could pose a burden for both SK Group and Chairman Chey.”

Meanwhile, SK Key Foundry has stated that the capital raised by SK Powertech last month will be used to introduce measurement equipment and enhance quality control at its semiconductor manufacturing facility in Busan.

Busan Mayor Park Hyung-joon has been actively promoting the city as a power semiconductor hub, aligning with the current administration’s strategy to foster the power semiconductor industry.

 

 

 

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