Intel to Sell NAND Flash Memory Business to SK Hynix for $9 Billion

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The world’s second-largest chipmaker, South Korea’s SK Hynix, on Tuesday introduced a $9 billion (roughly Rs. 66,000 crores) deal to purchase Intel’s flash reminiscence chip operation because it seeks to bolster its place in opposition to rival behemoth Samsung Electronics.

SK Hynix is already the world quantity two maker of DRAM chips, utilized in computer systems and servers, and the second-largest chipmaker total.

Nevertheless it has lagged out there for flash reminiscence, or NAND chips, that are utilized in on a regular basis gadgets reminiscent of smartphones and USB storage drives, in addition to industrial and medical gear.

In a regulatory submitting, SK Hynix mentioned it’s going to purchase Intel’s “whole NAND enterprise division excluding the Optane division” for KRW 10.Three trillion (roughly Rs. 66,300 crores), with Intel’s manufacturing unit in Dalian, China, included within the deal.

SK Hynix ranked fourth by world NAND gross sales within the second quarter this yr, in keeping with market researcher Trendforce. Intel was sixth.

Their mixture will see SK Hynix leapfrog Japan’s Kioxia and Western Digital of the US into second place with a market share of greater than 23 p.c, the Trendforce numbers confirmed.

The NAND and DRAM markets are each dominated by Samsung Electronics, and world chip demand has boosted income for the 2 South Korean companies in recent times.

The pair compete to provide chips to American giants reminiscent of Apple, Dell and HP, in addition to Chinese language corporations.

The Intel acquisition would strengthen the NAND operations of SK Hynix, which have “not been as robust as its different companies”, mentioned Ahn Ki-hyun, vice-president of the Korea Semiconductor Business Affiliation.

“With the deal, the corporate has firmly cemented its second-largest place within the world semiconductor business,” he added.

“In the long term, the deal paves a approach for it to turn into extra aggressive in opposition to Samsung.”

Shares down

The founding firm of SK Hynix was initially a part of the Hyundai group, one of many family-controlled conglomerates referred to as chaebol that dominate enterprise on the earth’s 12th-largest financial system.

In 2012, a multi-billion-dollar merger noticed it turn into a part of the SK Group, the third-largest of the chaebols, headed by Chey Tae-won, who’s at the moment married to the daughter of late South Korean president Roh Tae-woo.

SK Hynix has grown to turn into a significant firm in its personal proper and is the second Most worthy firm listed on Seoul’s KOSPI inventory market with a market capitalisation of KRW 62 trillion (roughly Rs. 3,99,220 crores), behind solely Samsung Electronics.

However SK Hynix shares had been down greater than two p.c on the announcement in morning commerce.

Its CEO Seok-Hee Lee mentioned in an announcement that the Intel acquisition will allow the agency to “proactively reply to numerous wants from prospects and optimise our enterprise construction”, and make its NAND flash market place “comparable with what we achieved in DRAM”.

The assertion cited Intel CEO Bob Swan saying the deal permits the US agency to concentrate on “differentiated know-how the place we will play a much bigger function within the success of our prospects”.

The acquisition will likely be paid for in money, funded by present reserves and borrowing, SK Hynix mentioned.


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