Chipping In

SK Chairman Chey Tae-won knows how to get growth by betting big.

- Grace Chung

Back in 2012, it was a mystery to many why Chey Tae-won spent $3 billion to buy control of troubled Hynix Semiconductor. Ten years after being bailed out by South Korea’s government, the world’s second-largest chipmaker was losing money and its stock sliding amid a global slump in demand for PCs and memory chips. South Korea’s SK Group, the sprawling conglomerate Chey chairs, had a wireless carrier, an oil and gas company, a hotel operator but no presence in chipmaking.

“Pretty much everyone in the financial services industry thought it was a terrible purchase,” says Morningstar Research Director Dan Baker in Hong Kong. SK Holdings’ stock fell 15% between the day in November 2011 the deal was announced and the day it closed the following February.

To Chey, though, the rationale was clear. “SK needed something else to grow,” he recalls during a rare interview held on the sidelines of the World Economic Forum’s annual meeting in Davos. “Someone needed to step up. It made sense to me.” SK’s wireless subsidiary, SK Telecom, bought a 21% stake in Hynix from a group of creditor banks, and Chey, already chairman of SK Group and SK Holdings, gained a new title: co-CEO of Hynix, later renamed SK Hynix.