The world’s second-largest chipmaker, South Korea’s SK Hynix, on Tuesday introduced a $9 billion (roughly Rs. 66,000 crores) deal to purchase Intel’s flash reminiscence chip operation because it seeks to bolster its place in opposition to rival behemoth Samsung Electronics.
SK Hynix is already the world quantity two maker of DRAM chips, utilized in computer systems and servers, and the second-largest chipmaker general.
But it surely has lagged out there for flash reminiscence, or NAND chips, that are utilized in on a regular basis gadgets corresponding to smartphones and USB storage drives, in addition to industrial and medical tools.
In a regulatory submitting, SK Hynix stated it’ll purchase Intel’s “complete NAND enterprise division excluding the Optane division” for KRW 10.Three trillion (roughly Rs. 66,300 crores), with Intel’s manufacturing facility in Dalian, China, included within the deal.
SK Hynix ranked fourth by world NAND gross sales within the second quarter this yr, in response to market researcher Trendforce. Intel was sixth.
Their mixture will see SK Hynix leapfrog Japan’s Kioxia and Western Digital of the US into second place with a market share of greater than 23 %, the Trendforce numbers confirmed.
The NAND and DRAM markets are each dominated by Samsung Electronics, and world chip demand has boosted income for the 2 South Korean companies in recent times.
The pair compete to produce chips to American giants corresponding to Apple, Dell and HP, in addition to Chinese language firms.
The Intel acquisition would strengthen the NAND operations of SK Hynix, which have “not been as robust as its different companies”, stated Ahn Ki-hyun, vice-president of the Korea Semiconductor Trade Affiliation.
“With the deal, the corporate has firmly cemented its second-largest place within the world semiconductor business,” he added.
“In the long term, the deal paves a method for it to turn into extra aggressive in opposition to Samsung.”
The founding firm of SK Hynix was initially a part of the Hyundai group, one of many family-controlled conglomerates often called chaebol that dominate enterprise on this planet’s 12th-largest economic system.
In 2012, a multi-billion-dollar merger noticed it turn into a part of the SK Group, the third-largest of the chaebols, headed by Chey Tae-won, who’s at present married to the daughter of late South Korean president Roh Tae-woo.
SK Hynix has grown to turn into a serious firm in its personal proper and is the second most beneficial firm listed on Seoul’s KOSPI inventory market with a market capitalisation of KRW 62 trillion (roughly Rs. 3,99,220 crores), behind solely Samsung Electronics.
However SK Hynix shares have been down greater than two % on the announcement in morning commerce.
Its CEO Seok-Hee Lee stated in an announcement that the Intel acquisition will allow the agency to “proactively reply to varied wants from clients and optimise our enterprise construction”, and make its NAND flash market place “comparable with what we achieved in DRAM”.
The assertion cited Intel CEO Bob Swan saying the deal permits the US agency to concentrate on “differentiated know-how the place we are able to play a much bigger position within the success of our clients”.
The acquisition will probably be paid for in money, funded by means of current reserves and borrowing, SK Hynix stated.
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