Expanding technological and financial support, including improved payment terms and an 870 billion KRW investment to strengthen suppliers' competitiveness in the semiconductor ecosystem
July 2
The Korea Fair Trade Commission (KFTC, Chairman Biung-Ghi Ju) held the "SK – 1st, 2nd, and 3rd-Tier Suppliers Win-Win Cooperation Agreement Signing Ceremony" at the SK Telecom Tower, with representatives from seven SK Group affiliates and their suppliers in attendance.
The seven participating affiliates are SK Hynix, SK Telecom, SK ecoplant, SK geocentric, SK siltron, SK AX, and SK Intelics.
This win-win agreement is designed to ensure that the benefits of SK’s mutual growth efforts flow seamlessly down to smaller 2nd-tier and lower-tier suppliers. This is the second such agreement established among large enterprise groups, following the Samsung Group's agreement on Monday, June 29.
The main contents of the agreement consist of ▲improving payment conditions for SK and its 1st and 2nd-tier suppliers, and ▲expanding mutual cooperation support, such as technological and financial aid, for SK's 1st, 2nd, and 3rd-tier suppliers. These measures were formulated through voluntary consultations between SK and its suppliers.
Key Content of the Agreement
1. Improvement of Payment Terms
First, SK and its 1st and 2nd-tier suppliers have agreed to improve payment conditions for their respective lower-tier partners. This reflects the understanding that "payment terms" are directly linked to liquidity and are the most critical factor for the stable business operations of SME suppliers.
SK's Commitment: SK will strive to pay its 1st-tier SME suppliers more swiftly and stably—such as within 10 days of the closing date—taking into account the characteristics of each industry. It will also maintain its principle of cash-equivalent payments and expand the "Win-Win Payment System." In particular, SK Telecom will expedite payments to SME suppliers using the "Direct Payment" program, ensuring payment within 2 days of the closing date.
(Note: The "Direct Payment" program provides 100% cash payments to SME suppliers within 2 days of the transaction expenditure approval date.)
1st and 2nd-Tier Suppliers' Commitment: These suppliers have also agreed to reasonably improve payment deadlines for their own partners. Corresponding to the favorable payment terms received from SK, they will improve their payment methods and introduce or expand the Win-Win Payment System. By having 1st and 2nd-tier SMEs participate in these improvements, the benefits of SK’s payment conditions are expected to reach the smaller 2nd-tier and lower-tier suppliers.
Incentives: Simultaneously, SK will prepare and provide various internal support measures for suppliers who faithfully participate in these initiatives, thereby encouraging more active involvement in improving payment terms.
2. Expansion of Customized Technological and Financial Support
Second, considering the nature of the semiconductor industry where cutting-edge technology is the primary source of competitiveness, SK will establish and expand various customized technological and financial support programs to strengthen the competitiveness of 1st, 2nd, and 3rd-tier suppliers within the semiconductor ecosystem.
SK Hynix, in collaboration with the government and local municipalities, will invest approximately 870 billion KRW to build a facility for empirical verification ("Trinity Fab"). This facility, aimed at shortening the mass production verification period and supporting advanced technology development for Materials, Parts, and Equipment (MPE) suppliers, will be provided free of charge. Furthermore, when SK Hynix and its suppliers jointly pursue R&D projects, SK Hynix will provide support funds to disperse the risk of failure, enabling suppliers to engage in R&D more boldly.
Semiconductor Ecosystem Fund: SK Hynix also plans to inject capital into a Semiconductor Ecosystem Fund to make equity investments in promising SME suppliers related to semiconductors. This demonstrates a proactive approach to strengthening the overall competitiveness of the domestic semiconductor ecosystem.
This agreement is expected to benefit approximately 4,300 suppliers within SK's transaction network. SK expressed its strong commitment to continuous compliance by planning to incorporate the core principles of this agreement into the "Fair Trade Agreements" to be signed with its suppliers early next year.
KFTC Chairman Biung-Ghi Ju stated, "The future competitiveness of SK lies in the scientific and technological capabilities produced by our community, and SK is a vital member of the Republic of Korea community."
He emphasized, "Win-win cooperation between large enterprises and SMEs no longer merely represents corporate social responsibility; it is a core element for promoting innovation and achieving sustainable growth." He added, "Through this agreement, I hope an enterprise ecosystem of mutual cooperation—where the fruits of innovation flow without obstruction from SK to 1st, 2nd, and 3rd-tier suppliers—will take root as the new standard."
The KFTC plans to closely monitor the faithful implementation of this agreement through Fair Trade Agreement evaluations and will provide incentives to excellent companies in the future. Furthermore, the KFTC will continuously encourage the conclusion of such win-win agreements to ensure that a desirable culture of mutual growth firmly settles across the industrial ecosystem.