SK Group chairman Chey Tai-won will dig out personal wealth to help the group wholly own LG Siltron, which is the only maker in the country of silicon wafers essential in semiconductor fabrication.

According to investment banking sources on Monday, SK Corp., the holding company of SK Group, recently signed an agreement to acquire a 19.6 percent stake in LG Siltron from KTB PE. In addition, Chey drew the option to become as the preferred bidder for the remaining 29.4 percent stake in the company held by Woori Bank and other creditors.

In January, SK Group bought a 51 percent stake in LG Siltron for 620 billion won ($ 548.3 million) in order to increase the degree of vertical integration across its semiconductor business. The world’s second largest memory chipmaker Hynix has become the primary profit maker for SK Group since it came under the SK umbrella.

LG Siltron would be fully owned by SK when the ongoing deals are sealed. "The deals will pave the way for LG’s stable control of LG Siltron while cutting down on additional costs at the group level,” an SK source said.

SK Hynix shares closed Tuesday up 2.6 percent at 55,400 won.

Currently, SK Hynix is drawing a bigger picture for its semiconductor business with a plan to acquire Toshiba in Japan.

"Chey is setting up a roadmap to bring basic materials and semiconductor chemicals to its value chain around SK Hynix and Toshiba,” said an industry source.

If the transactions for LG Siltron are sealed, SK will complete its own portfolio of semiconductor business with semiconductor production (SK Hynix) and supply of basic materials (LG Siltron) and special industry gas (SK Materials).

“SK Hynix is aggressively expanding its fleet of semiconductor plants as it announced a plan to build a NAND Flash factory in Cheongju, Chungbuk Province last December. Expectations are high about semiconductor business across the group,” said an SK official.

By Jung Wook

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