South Korean firm SK Hynix to acquire Intel's NAND memory business for $9 billion

2020-10-20

South Korean memory chipmaker announced today that it has entered an agreement to acquire Intel's NAND memory and storage business for about $9 billion.

As part of the deal, SK Hynix will get Intel's NAND SSD business, NAND component and wafer business, intellectual property (IP) licences and the NAND memory manufacturing plant in Dalian, China

The company will initially pay Intel $7 billion to acquire its NAND SSD-associated IPs and employees and Intel's Dalian facility.

The remaining payment of $2 billion will be completed in 2025, which will enable SK Hynix to acquire IPs related to the design and manufacturing of NAND flash wafers, research employees, and the Dalian fab workforce.

Intel will continue to use Dalian facility to manufacture NAND water until the deal is closed.

Intel's Optane memory business is not part of the deal and it will remain with the US firm.

The two firms expect to get required regulatory approvals in 2021 with the deal expected to close in 2025.

If approved, the deal would help SK Hynix to surpass Japan's Kioxia and American firm to become the world's second-largest NAND flash memory maker.

The company expects to deal to help in improving the competitiveness of its storage solutions in the rapidly growing NAND flash space.

"SK Hynix expects that the transaction would enable SK Hynix to grow the memory ecosystem to the benefit of customers, partners, employees and shareholders," .

The South Korean firm ranked fourth in global NAND sales in the second quarter of 2020, according to market researcher Trendforce.  

Samsung currently dominates the NAND and DRAM markets.

An increase in chip demand across the globe in recent years has helped both South Korean firms to increase their sales. Presently, they both compete with each other to supply chips to American tech giants like Apple, HP, Dell and many Chinese firms.

"I am pleased to see SK Hynix and Intel's NAND division, which have led the NAND flash technology innovation, work to build the new future together," said Seok-Hee Lee, CEO of SK Hynix.

"By taking each other's strengths and technologies, SK Hynix will proactively respond to various needs from customers and optimise our business structure, expanding our innovative portfolio in the NAND flash market segment, which will be comparable with what we achieved in DRAM," he added.

Bob Swan, Intel CEO, commented: "I am proud of the NAND memory business we have built and believe this combination with SK Hynix will grow the memory ecosystem for the benefit of customers, partners and employees."

"For Intel, this transaction will allow us to further prioritise our investments in differentiated technology where we can play a bigger role in the success of our customers and deliver attractive returns to our stockholders."