Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
SK hynix acquires Intel's NAND biz for $9 bil.
SK hynix CEO Lee Seok-hee / Courtesy of SK hynix
By Baek Byung-yeul
By Baek Byung-yeul
SK hynix will acquire Intel's NAND memory and storage business for $9 billion in a move to make it a comprehensive leader in the memory chip business, the SK Group affiliate said Tuesday.
The Korean chipmaker said it signed an agreement with the U.S. chip giant and added the transaction includes Intel's NAND SSD business, the NAND component and wafer business, and a NAND memory manufacturing facility in Dalian, China.
SK hynix said it will pay $7 billion by 2021 to first acquire Intel's factory in China.
“SK hynix and Intel will endeavor to obtain the required governmental approvals expected in late 2021. Following receipt of these, SK hynix will acquire from Intel the NAND SSD business as well as the Dalian facility, with the first payment of $7 billion,” SK hynix said.
The company added it expects the deal will be finalized by March 2025 as the firm will pay the remaining $2 billion by then.
Under the acquisition, SK hynix expects its market share in the NAND memory business will allow the company to step up its business expansion. According to market researcher Omdia, Intel held the fourth-largest market share of 11.5 percent in the NAND sector in the second quarter while SK hynix was the fifth with 11.4 percent.
“With this acquisition, SK hynix aims to enhance the competitiveness of its storage solutions, including enterprise SSDs, in the rapidly growing NAND flash space, and further aims to take a leap forward as one of the leading global semiconductor companies in the industry. SK hynix expects that the transaction will enable it to expand the memory ecosystem to the benefit of customers, partners, employees and shareholders,” the company said.
With more companies adopting big data technology, the NAND memory market is expected to grow explosively in the following years. Omdia said the NAND market, which was valued at $46 billion in 2019, will increase to $85.5 billion in 2024 with an annual growth rate of 13.2 percent.
“I am pleased to see SK hynix and Intel`s NAND division, which have led the NAND flash technology innovation, work to build a new future together,” SK hynix CEO Lee Seok-hee said in a statement. “By taking each other's strengths and technologies, SK hynix will proactively respond to various needs from customers and optimize our business structure, expanding our innovative portfolio in the NAND flash market segment, which will be comparable with what we achieved in DRAM,” the CEO added.