SK Telecom (NYSE: SKM) established SK Hyper, a wholly owned subsidiary dedicated to developing AI data center (AIDC) infrastructure, as the company advances plans to build up to 15GW of AI data center capacity by 2035. The company’s Board of Directors also approved investments of up to KRW 750 billion (approximately US$540 million)through 2030 to capitalize the new company and support its long-term business development activities.
SK Hyper will serve as the primary vehicle for developing SK Telecom’s AI data center business, taking responsibility for securing development sites, constructing and operating electrical substations, acquiring customers, and commercializing AI data center projects. The new company reflects SK Telecom’s strategy of creating a dedicated organization focused exclusively on hyperscale AI infrastructure while remaining wholly owned by the parent company. SK Telecom will provide capital to SK Hyper in phases through 2030 within the approved investment limit.
The move follows SK Telecom’s announcement earlier this month outlining a long-term strategy to position South Korea as an AI infrastructure hub for Asia. Under that plan, SK Hyper will initially target the phased deployment of 5GW of AI data center capacity beginning in 2029, before expanding toward a total of 15GW by 2035. Development will begin with a GW-class AI data center cluster in Ulsan, followed by additional GW-scale campuses in the Chungcheong and Honam regions.
To support execution, SK Telecom recently established an AIDC Integrated Development Division reporting directly to the CEO. The organization brings together SK Group’s AI infrastructure capabilities, including planning, engineering, construction, operations, and customer engagement, under a single leadership structure.
On the same day, SK Hyper’s Board appointed Chung Suk-geun as the company’s inaugural CEO. Chung currently serves as Head of SK Telecom’s AI Company-in-Company (AI CIC) and also leads the AIDC Integrated Development Division, where he coordinates AI data center execution across SK Group.
The establishment of SK Hyper builds on a broader AI infrastructure strategy announced on July 5, when SK Telecom outlined plans for one of the world’s largest announced AI data center development programs.
At that time, the company said growing global demand for AI model training and inference is creating a shortage of high-performance computing infrastructure. Citing research from McKinsey & Company, SK Telecom noted that worldwide data center demand is expected to increase by approximately 19% to 22% annually while supply struggles to keep pace, potentially leaving the U.S. market alone short by roughly 15GW of capacity by 2030.
SK Telecom also estimated that constructing a typical 1GW AI data center could require approximately KRW 70 trillion (approximately US$50 billion) in total project investment. The company expects financing to come from a combination of internal capital, strategic investment partners, long-term customer contracts, and project financing.
The company argues that South Korea offers several competitive advantages for hyperscale AI infrastructure, including domestic production of high-bandwidth memory (HBM), a stable electricity supply supported by nuclear and LNG generation, and decades of experience operating large-scale semiconductor manufacturing facilities.
“SK Hyper’s role is to turn SK Group’s blueprint for Asia’s AI Infrastructure Hub into reality,” said Chung Suk-geun, CEO of SK Hyper. “Through systematic and rapid execution, we will secure core infrastructure and customers, and contribute to Korea’s advancement to AI G3.”
• SK Telecom established SK Hyper as a wholly owned AI data center development subsidiary.
• Board approved investments of up to KRW 750 billion (approximately US$540 million) through 2030.
• SK Hyper will oversee site acquisition, substations, customer development, and commercial operations.
• Initial deployment target is 5GW beginning in 2029.
• Long-term objective is 15GW of AI data center capacity by 2035.
• Development begins with a GW-scale AI data center cluster in Ulsan, followed by Chungcheong and Honam.
• Chung Suk-geun appointed inaugural CEO of SK Hyper.
• SK Telecom recently established an AIDC Integrated Development Division reporting directly to the CEO.
• Earlier company estimates indicate a typical 1GW AI data center could require approximately KRW 70 trillion (approximately US$50 billion) in project investment.
• SK Telecom plans to begin operating its first AI Factory in 2027 before expanding to gigawatt-scale deployments.
🌐 Analysis
The formation of SK Hyper represents an organizational milestone rather than a change in strategy. Earlier this month, SK Telecom announced its intention to develop up to 15GW of AI data center capacity. The creation of a dedicated subsidiary provides an execution vehicle focused on land acquisition, electrical infrastructure, customer development, financing, and commercial operations required for projects of this scale.
