SK hynix is buying Intel’s Nand memory and storage business for USD 9.00 billion.
Pending governmental approvals, the company will acquire the target’s Nand SSD (solid state drives) division, associated intellectual property and employees, as well as the Dalian memory manufacturing facility in China, for USD 7.00 billion in 2021.
SK hynix will then snap up the remaining assets and workforce for USD 2.00 billion upon the final closing of the transaction, which is expected to take place in March 2025.
Following the acquisition, Intel will continue to make Nand wafers at the Dalian manufacturing facility and retain its Intel Optane business.
Through the deal, SK hynix plans to enhance the competitiveness of its storage operations and position itself as one of the leading global semiconductor companies in the industry.
It will also be able to grow the memory ecosystem for customers, partners and shareholders, among others.
During the six months ended 30th June 2020, Intel’s Nand businesses generated around USD 2.80 billion of the revenue for the vendor’s non-volatile memory solutions group (NSG) and contributed USD 600.00 million to NSG’s operating income.
Intel plans to use the proceeds from the acquisition to deliver leading products and advance its long-term growth priorities, such as artificial intelligence and 5G networking.
SK hynix will combine the company’s technology and manufacturing capabilities to establish a 3D Nand services portfolio, which includes enterprise SSDs.
Seok-Hee-Lee, chief executive of the buyer, said: “By taking each other`s strengths and technologies, SK hynix will proactively respond to various needs from customers and optimise our business structure, expanding our innovative portfolio in the Nand flash market segment, which will be comparable with what we achieved in DRAM [dynamic random access memory chips].”
His counterpart at Intel, Bob Swan, noted: “For Intel, this transaction will allow us to further prioritise our investments in differentiated technology where we can play a bigger role in the success of our customers and deliver attractive returns to our stockholders.”
© Zephus Ltd