South Korea Plans Legislation to Allow SK Hynix to Bring in External Investors for New Fab Construction
Miles Bennett
A South Korean lawmaker has proposed cutting the mandatory ownership threshold from 100% to just over 50%, letting SK Hynix set up joint ventures to fund new fabs. This means Seoul is opening a legal channel to finance chip expansion on a scale traditional funding cannot cover.
What does the current law block?
Korea's Fair Trade Act requires a second-tier subsidiary of a holding company to own 100% of any new entity it creates — no outside shareholders allowed.
SK Group's chain runs SK Inc. → SK Square → SK Hynix, placing Hynix exactly at that second tier.
This means → Hynix must fund every new fab entirely on its own or through the group — no external capital partners.
What does the amendment change?
Lawmaker Kim Won-i proposes lowering the mandatory stake to above 50%, allowing Hynix to set up a joint-venture SPC — a special-purpose company created solely to house one project.
In plain terms = Hynix keeps majority control; the other half of the money can come from private investors or government strategic-industry funds.
Korea's Finance Ministry floated the same idea in a December policy brief; this bill turns that signal into legislation.
Where would the fabs go, and who approves them?
The bill includes a location requirement: each joint-venture SPC must headquarter outside the Seoul metropolitan area, aligning with the government's push to steer advanced manufacturing into regional economies.
Every project needs clearance from the Fair Trade Commission and the National High-Tech Strategic Industries Committee, with a re-evaluation every five years.
This reflects a deliberate trade-off — loosen the financing rule, but keep a regulatory gate through siting and approval conditions.
Can SK Hynix actually afford its expansion plans?
Hynix raised $26.5 billion last week via a U.S. ADR — American Depositary Receipt — offering.
But the full bill is far larger: the government's southwest semiconductor plan has Hynix and Samsung each pledging ₩400 trillion (roughly $268 billion).
This means → the ADR covers only a fraction of total capex. Traditional financing falls well short, and that gap is the real-world driver behind this legislation.
Where does the raised capital go?
Per Newsis, Hynix plans to direct the ADR proceeds toward its first fab in the Yongin semiconductor cluster, the Cheongju P&T7 advanced-packaging facility, EUV lithographic scanners — machines that etch chip circuits with extreme-ultraviolet light — and other advanced equipment.
Kim Won-i stressed that the Honam-region cluster needs funding, policy, legislation, and infrastructure to advance in parallel.
In plain terms = whether this bill passes will determine if Hynix can accelerate its massive buildout without giving up control.
Content is for reference only, not financial advice.