SK hynix gets OK from UK for Intel's NAND biz acquisition

Korean chipmaker now needs to get approval from China, Singapore

By Baek Byung-yeul

SK hynix is almost finished with its acquisition of Intel's NAND flash business after receiving the green light from an antitrust regulator in the U.K., the company said Tuesday.

In October 2020, SK hynix signed a deal to acquire the U.S. chip giant's NAND flash business for $9 billion. After the agreement had been made, SK submitted applications for approval to the antitrust regulators of eight countries. The U.K. approval is the sixth one, so SK hynix now needs to earn the approvals of China and Singapore.

The Competition and Markets Authority of the U.K. (CMA) announced Monday (GMT) that it had cleared Intel's sale of NAND's flash business to SK hynix. The antitrust agency said it has decided not to refer the deal to an in-depth second phase approval process, based on the information they have available.

“The CMA has cleared the anticipated acquisition by SK hynix Inc. of Intel Corporation's NAND and SSD business,” the antitrust body announced, adding that it will soon publish a full text on why they had cleared the deal.

Regarding the approval, SK hynix said that the company welcomes the U.K. anti-trust body's decision. “We welcome the U.K.'s approval of the deal,” a company official said. “We will work hard to ensure the smooth approval of the remaining authorities.”

Antitrust regulators in the United States, European Union, Taiwan and Korea have approved the acquisition deal.

The global NAND flash market is dominated by big players, with Samsung Electronics accounting for the largest share of 33.5 percent during the first quarter of this year, according to data by market tracker TrendForce.

SK hynix had the fourth-largest share of 12.3 percent after Kioxia with 18.7 percent and Western Digital with 14.7 percent. Intel had the sixth-largest share of 7.5 percent.

Industry watchers say the last hurdle for SK hynix acquiring Intel's NAND flash business will be an approval from China, as that country has been interfering with the merger of semiconductor companies which involve U.S. players, due to the fierce competition between the world's two biggest economies.

In 2018, U.S. chipmaker Qualcomm had to withdraw its plan to acquire the Dutch-based automotive chip maker NXP after failing to acquire an approval from China. It also remains to be seen whether the Chinese government will grant permission to U.S.-based graphic chip maker Nvidia's merger deal with U.K.-based chip design firm Arm.

Given the fact that SK hynix was swiftly able to earn these approvals so far, industry officials here have said that antitrust regulators don't think the acquisition deal raises any market competition concerns. Thus, the company is presumed to earn approval from China as well.