Intel to Sell NAND Flash Memory Business to SK Hynix for $9 Billion


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 towards 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 akin 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 “whole 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 international NAND gross sales within the second quarter this yr, in accordance with market researcher Trendforce. Intel was sixth.

Their mixture will see SK Hynix leapfrog Japan’s Kioxia and Western Digital of america into second place with a market share of greater than 23 p.c, the Trendforce numbers confirmed.

The NAND and DRAM markets are each dominated by Samsung Electronics, and international chip demand has boosted income for the 2 South Korean companies lately.

The pair compete to produce chips to American giants akin to Apple, Dell and HP, in addition to Chinese language corporations.

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 Business Affiliation.

“With the deal, the corporate has firmly cemented its second-largest place within the international semiconductor business,” he added.

“In the long term, the deal paves a approach for it to change into extra aggressive towards Samsung.”

Shares down

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 financial system.

In 2012, a multi-billion-dollar merger noticed it change into a part of the SK Group, the third-largest of the chaebols, headed by Chey Tae-won, who’s at the moment married to the daughter of late South Korean president Roh Tae-woo.

SK Hynix has grown to change into a significant firm in its personal proper and is the second most dear 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 had been down greater than two p.c 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 give attention to “differentiated expertise the place we will play an even bigger position within the success of our clients”.

The acquisition will probably be paid for in money, funded by current reserves and borrowing, SK Hynix stated.

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