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CALIFORNIA: Intel has agreed to sell its NAND memory chip business to SK Hynix for $ 9 billion in a cash deal that would propel the South Korean chipmaker to second place in the world rankings.
The deal will allow SK Hynix to overtake Japan’s Kioxia in the NAND memory market and narrow the gap with market leader Samsung Electronics as the shift to work from home increases demand for chips used in tablets and servers.
SK Hynix said Intel would sell its entire NAND business, including its solid state drives, NAND products and wafer business, and its factory in Dalian, China. Intel would keep its Optane business, its advanced memory technology.
The deal would allow Intel to focus on its remaining memory business, Optane, a person familiar with the matter, told Reuters.
Intel did not immediately respond to Reuters requests for comment.
DEMAND DRIVEN BY PANDEMIC
The Nand Flash industry grew in the April-June quarter thanks to strong demand for PCs and servers, as the COVID-19 pandemic forced millions of people to work from home, according to market researcher Trendforce.
Hynix, which counts Apple and Huawei Technologies as customers, ranks a distant fourth in the market for NAND memory chips, although it ranks second after Samsung Electronics in DRAM memory sales.
Samsung is the leader in the NAND flash market with a 31.4% share, followed by Kioxia with 17.2%, SK Hynix with 11.7% and Intel and Micron with 11.5% each.
With the acquisition, SK Hynix, part of South Korean conglomerate SK Group, will have a 23.2 percent market share, narrowing the gap with its rival in the city, Samsung Electronics.
The Wall Street Journal previously reported that the deal was imminent. Intel shares rose nearly 3 percent after the report.
