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.
Korea approves SK hynix's acquisition of Intel's NAND business
SK hynix's chip-making plant in Icheon, Gyeonggi Province / Courtesy of SK hynix
By Baek Byung-yeul
By Baek Byung-yeul
Korea approved SK hynix's planned acquisition of Intel's NAND flash business, deciding the acquisition won't hurt fair trade competition and isn't against antitrust issues.
The Fair Trade Commission (FTC) said Thursday its final approval of the planned acquisition is because it is unlikely to limit competition, as the combined market share of the two companies' NAND business is still lower than the No. 1 company Samsung Electronics.
“With the acquisition, SK hynix will be able to strengthen its competitiveness in the memory semiconductor market by beefing up NAND flash, which has poor performance compared to its flagship DRAM business, and Intel will be able to clean up its non-mainstream business, which accounts for less than 10 percent of its total sales,” the FTC said.
Last October, SK hynix reached an agreement to acquire Intel's NAND flash memory chip business for $9 billion. After the agreement, SK submitted applications for approval to antitrust regulators in other countries including Korea.
According to market tracker TrendForce, SK hynix was the fourth-largest NAND flash maker with a 12.3 percent share in the January-March period of this year, while Intel was the No. 6 company with a market share of 7.5 percent. Samsung had the largest share of 33.5 percent, followed by Kioxia with 18.7 percent and Western Digital with 14.7 percent.
Because of the deal, SK Group's semiconductor affiliate will be positioned to become the world's No. 2 NAND flash memory chip manufacturer with a combined share of around 20 percent. Unlike DRAM chips, which can only write and store data, NAND chips are used to store data even when a digital device is powered down. The usage of NAND chips is increasingly expanding into server computing systems.
SK already received two approvals from the U.S. last year and the European Union on May 21, and the company is waiting for the review results in other countries including China, the U.K., Taiwan, Brazil and Singapore.
SK hynix welcomed the FTC's approval. “We welcome the Fair Trade Commission's decision to approve the acquisition. We will work closely with the authorities to achieve positive results in other countries as well,” an SK hynix official said.
The FTC also granted approval to AMD over the U.S. chip giant's acquisition of adaptive computing platforms company Xilinx, saying it judged that there are no concerns about competition restrictions because the two companies' main businesses are different. AMD signed the acquisition deal last year for $35 billion.