South Korea’s memory chipmaker SK Hynix Inc. is considering splitting its foundry business into an independent subsidiary to enhance its competitiveness in the burgeoning system chip market.

According to industry sources on Wednesday, SK Hynix held a session to brief the spin-off plan to its foundry business employees on April 18. The company on Thursday confirmed that it is reviewing the plan to spin off the business to boost its competitiveness and could announce details within a month. The new entity that would be separated in the second half of this year will likely be named SK Hynix System.

The company currently manufactures system chips at its M8 foundry line in Cheongju, North Chungcheong Province in Korea. Unlike its mainstay memory chip products used to store data, system chips, or non-memory chips, are used to process data. The demand for non-memory chips is exploding recently due to their expanded applications to devices for the Internet of Things (IoT), wearable, networks and computer’s central processing unit (CPU).

SK Hynix aims to meet the growing demand by bolstering its foundry business through spin-off. It plans to develop other foundry manufacturing processes for finger print recognition sensors or chips enabling the so-called Force Touch, a technology pioneered by Apple that allows users to carry out different tasks based on the amount of pressure.

According to the Semiconductor Equipment and Materials International (SEMI), the global semiconductor foundry market is estimated to grow from $50 billion last year to $100 billion by 2025. The memory chip market is estimated to reach $100 billion this year.

Shares of SK Hynix closed Thursday at 53,600 won, down 0.19 percent or 100 won from the previous session.

By Lee Dong-in

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