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.
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.
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.