SK hynix's Intel NAND acquisition pushes up stock

The Korea Times

The Korea Times

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Wed, November 29, 2023 | 15:10

Companies

SK hynix's Intel NAND acquisition pushes up stock

Posted : 2021-12-30 16:38

Updated : 2021-12-30 17:01

SK hynix's headquarters in Icheon, Gyeonggi Province / Courtesy of SK hynix

New affiliate Solidigm to add enterprise SSD to SK's NAND biz

By Kim Bo-eun

SK hynix's stock price is on a strong upward trajectory as it moves to close its multi-billion-dollar deal to take over Intel's NAND business.

The local chipmaker's stock price closed at 131,000 won, up 3.15 percent from the previous day's close on the KOSPI, according to data provided by the Korea Exchange (KRX), the country's top bourse operator. SK hynix's stock price has been moving up since hitting a 52-week low of 90,500 won on Oct. 13.
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After receiving approval from Chinese antitrust regulators last week, SK hynix has completed the first stage of the acquisition by taking over the U.S. chip giant's solid-state drive (SSD) business and its chip fabrication plant in the Chinese city of Dalian. SK hynix will pay $7 billion of the $9 billion acquisition for the first stage.

The remaining $2 billion will be paid by March 2025, when SK hynix takes over Intel's intellectual property regarding NAND flash wafer design, production and workers at the Dalian plant, as well as other tangible and intangible assets.

SK hynix has named its new U.S. affiliate, which will be in charge of the SSD business, "Solidigm." The new company, based in San Jose, California, will acquire Intel's SSD business and manage the development, production and sale of products. Its CEO, Lee Seok-hee, will double as the executive chairman of Solidigm, to lead the integration of the new business with the SK affiliate. Intel Senior Vice President Rob Crooke will be appointed as Solidigm's CEO.

The semiconductor affiliate of SK Group plans to use the latest acquisition to strengthen the competitiveness of its NAND business. SK is the world's second-largest memory chipmaker, but its existing NAND business is competitive only in products for mobile phones. Solidigm, on the other hand, is strong in enterprise SSDs.

In a major reversal from its earlier thoughts that "winter is coming" for the memory chip industry because of a difficult pricing environment, Morgan Stanley, a top-tier U.S.-based investment bank, earlier this month forecast a 7.7 percent growth in semiconductor sales in 2022, and picked chip stocks among the preferred stocks for next year.

Micron Technology, which trails SK in the global DRAM memory chip segment, also shared an optimistic outlook for the memory chip market in 2022, saying that it expects a healthy supply-demand dynamic in both DRAMs and NANDs. The U.S. company's stock price topped $90 on Dec. 21 for the first time since April.

bkim@koreatimes.co.kr