Intel is selling off its Dalian factory in the deal, which is a significant part of the company’s operations in China.
South Korean semiconductor company SK Hynix has confirmed that it agreed to acquire Intel’s Nand memory and storage business in a deal worth $9bn.
The two companies aim to obtain governmental approval of the deal by the end of 2021. Once the companies receive the go-ahead, SK Hynix will acquire the assets in two phases up to 2025, with the first involving a payment of $7bn and the second involving the remaining $2bn.
The transaction will include the Nand SSD business, the Nand component and wafer business and the Dalian Nand memory manufacturing facility in China. Following the acquisition, Intel will retain its distinct Intel Optane business.
Optane, as noted by the New York Times, is the brand name for Intel’s 3D XPoint technology, which was developed in collaboration with Micron Technology to offer higher data transfer speeds than conventional Nand flash.
Endpoint Technologies Associates analyst Roger Kay told the New York Times that Optane is “Intel’s crown jewel in the memory sphere”.
Intel to focus on other priorities
News of the acquisition was first reported earlier this week by the Wall Street Journal before the deal was confirmed. The Wall Street Journal noted that the Dalian factory is Intel’s only major foundry in China, which means that the deal will significantly reduce Intel’s presence in the Asian nation.
In its statement, SK Hynix said that it is purchasing the assets from Intel in a bid to enhance the competitiveness of its storage solutions in the Nand flash space. The deal will make SK Hynix the second largest manufacturer of Nand memory, with Samsung retaining the top spot.
Intel said that it intends to use the proceeds from the transaction to deliver leadership products and advance its long-term growth priorities in areas such as AI, 5G networking and the intelligent, autonomous edge.
Seok-Hee Lee, chief executive officer of SK Hynix, said: “I am pleased to see SK Hynix and Intel’s Nand division, which have led the Nand flash technology innovation, work to build the new future together.
“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.”
Bob Swan, chief executive at Intel, said that he is “proud” of the Nand memory business that Intel has built. “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,” he added.