US chip maker Intel sells its NAND memory business to SK Hynix for $ 9 billion

US chip maker Intel sells its NAND memory business to SK Hynix for $ 9 billion

The two companies said in a statement on Tuesday that SK Hynix will acquire Intel’s NAND memory chip business, including related manufacturing and design patents, as well as the U.S. company’s factory in Dalian, China. Intel’s NAND flash memory products are used in devices such as smartphones, tablets, and hard drives. The US company will retain Optane, an advanced memory chip technology company.

The deal is expected to expire in March 2025.

SK Hynix shares were last down more than 2% in Seoul.

The acquisition marks the latest major partnership in the rapidly consolidating semiconductor industry.

NVidia (NVDA), Known primarily as the maker of chips for video game graphics, last month announced that it would acquire UK chip designer Arm for $ 16 billion. Advanced Micro Devices (AMD) Advanced procurement talks are reported Xelenx (Xlnx) In a deal that could be worth more than $ 30 billion, Depending To The Wall Street Journal, which cited people familiar with the matter. Xilinx told CNN Business that it does not comment on “rumors and speculation.” AMD did not respond to a request for comment outside normal business hours.
The deal comes after Intel admitted it is struggling to produce the next generation of flagship chips. The company said in July that production of the 7-nm chips would be delayed until 2022. Meanwhile, competitors said Taiwan Semiconductor Industry Corporation (TSM) (TSMC) and South Korea’s Samsung are already successfully producing and selling chips.

Intel remains an industry leader when it comes to making chips, and it remains the only US company able to compete with TSMC and Samsung when it comes to designing, manufacturing and producing advanced chips.

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But staying ahead costs a lot of money.

US semiconductor companies spent $ 72 billion on research and development and capital expenditures in 2019, compared to $ 40 billion in 2007, according to a September report from the Eurasia Group.

Intel CEO Bob Swan said in a statement that the deal “will allow us to further prioritize our investments in disparate technology as we can play a greater role in the success of our customers and achieve attractive returns for our shareholders.”

For SK Hynix, acquiring a portion of Intel’s memory chip business would allow the South Korean company to move from fourth place in the global NAND flash maker ranking to second place, just behind rival Samsung.

The company currently has a market share of 11.7%, compared to Samsung’s 31.4% share. Depending To TrendForce. With Intel’s business, it will have a consolidated market share of 23.2%.
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