South Korea’s ruling Democratic Party of Korea (DPK) has proposed changes to the country’s corporate laws that would make it easier for semiconductor giant SK Hynix to raise capital for new chip manufacturing facilities. The move is part of the government’s broader strategy to strengthen South Korea’s position as a global leader in artificial intelligence (AI) and advanced semiconductor manufacturing.
The proposed amendment would relax existing regulations governing companies operating in strategic high-tech industries, allowing subsidiaries of subsidiaries to establish joint ventures with external investors. If approved, the new rules would primarily benefit SK Hynix, one of the world’s leading manufacturers of High-Bandwidth Memory (HBM) chips used in AI processors developed by companies such as Nvidia.
Under the proposal, SK Hynix would be allowed to bring in outside investors for new semiconductor fabrication plants, provided it retains at least 50% ownership in the joint venture. The current legal framework restricts such fundraising structures, making it more difficult for the company to finance large-scale expansion projects.
The legislative proposal comes shortly after SK Hynix completed a $26.5 billion U.S. share offering. However, analysts believe the company will require substantially more funding to support its ambitious investment plans as global demand for AI chips continues to rise.
The South Korean government has announced major initiatives to expand the country’s semiconductor industry, including plans to develop new chip manufacturing clusters in the southwest region. Both SK Hynix and Samsung Electronics have pledged to invest approximately 400 trillion won (around $268 billion) each in expanding semiconductor production capacity over the coming years.
Lawmakers backing the amendment said rapid construction of advanced semiconductor fabrication plants is essential for South Korea to remain competitive against major global rivals in the semiconductor and AI industries. They argued that traditional financing methods alone may no longer be sufficient to support projects of this scale.
As part of the proposed legislation, any newly established joint venture would also be required to locate its headquarters or primary office outside the Greater Seoul metropolitan area. The measure aligns with the government’s objective of promoting balanced regional economic development and encouraging high-tech investments in other parts of the country.
Despite the positive policy developments, SK Hynix shares remained under pressure in Tuesday’s trading. The company’s Seoul-listed stock fell 8.6%, extending losses from the previous session as investor enthusiasm following its recent Nasdaq debut moderated.
If enacted, the proposed reforms are expected to provide SK Hynix with greater financial flexibility while accelerating South Korea’s efforts to expand domestic semiconductor manufacturing and strengthen its leadership in the global AI supply chain.
Disclaimer: This report has been editorially prepared using publicly available information. While every effort has been made to ensure accuracy, unintentional errors or omissions may occur. Readers are encouraged to verify important information through official sources.
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