SK hynix acquires Intel's NAND business

Written by Jennifer Allen

October 20, 2020 | 15:00

Tags: #acquisition #business

Companies: #intel #sk-hynix

SK hynix and Intel have agreed a deal which has SK hynix acquiring Intel's NAND memory and storage business for $9 billion. 

The deal includes the NAND SSD business, the NAND component and wafer business, along with the Dalian NAND memory manufacturing facility in China. Intel will continue to have its Intel Optane business which makes SSD memory modules. Originally first reported by the Wall Street Journal, the purchase by SK hynix means it is now one of the world's largest NAND memory makers, second only to Samsung. 

For Intel, it means they can now use the proceeds from the deal to focus on artificial intelligence, 5G and edge computing. In a statement, Intel chief executive officer, Bob Swan, explained, "for Intel, this transaction will allow us to 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."

Intel seems to be going all in with its plans to expand in artificial intelligence and 5G with it previously selling the majority of its modem business to Apple for around $1 billion and also citing back then that it would be to allow the firm to put "our full effort into 5G where it most closely aligns with the needs of our global customer base."

As is customary for such hefty deals, regulatory approval isn't expected until late 2021 with a final closing of all assets taking place in March 2025. In the meantime, Intel will continue to manufacture NAND wafers at its Dalian foundry. 

NAND business represented about $2.8 billion of revenue for Intel in the six month period ending June 27th 2020 which, according to the Wall Street Journal, made up the majority of the firm's total memory sales during that time period. It seems like quite a big shift for Intel, albeit not an unexpected one given its continued plans for 5G and AI. 

SK hynix CEO Seok-Hee Lee has already explained that the deal will allow it to "optimise [its] business structure, expanding [its] innovative portfolio in the NAND flash market segment." 

It comes at a time when the US government has placed trade restrictions on Chinese technology which may well be why Intel wants rid of its Dalian facility in the long term, being its only major foundry in the country. 

While we won't see the effects of this purchase for a while yet, it seems clear that SK hynix is aiming to be more competitive within the storage market while Intel pursues a different direction. Keep your eyes on what happens next. 


Discuss this in the forums
YouTube logo
MSI MPG Velox 100R Chassis Review

October 14 2021 | 15:04