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article imageSK Hynix to buy Intel's NAND memory chip business in $9bn deal

By AFP     Oct 19, 2020 in Business

The world's second-largest chipmaker, South Korea's SK Hynix, is to buy Intel's flash memory chip operation in a deal worth $9 billion, it said Tuesday, as it seeks to bolster its position against Samsung.

In a regulatory filing, the chipmaker said it will acquire Intel's "entire NAND business division excluding the Optane division" for 10.3 trillion won.

The deal includes Intel's factory in Dalian, China, it added.

SK Hynix was already the world number two DRAM chipmaker and second overall but has lagged in the NAND memory chip category, where it ranked fourth according to Yonhap news agency.

Both markets are dominated by rival South Korean behemoth Samsung Electronics, and global chip demand has driven the two firms' profits upwards in recent years.

The two compete to supply chips to companies such as US giant Apple, Dell and HP, as well as Chinese firms.

SK Hynix CEO Seok-Hee Lee said in a statement the acquisition will enable the firm to "proactively respond to various needs from customers and optimise our business structure", and make its NAND flash market position "comparable with what we achieved in DRAM".

The statement cited Intel CEO Bob Swan saying the deal allows the US firm to focus on "differentiated technology where we can play a bigger role in the success of our customers".

The acquisition will be paid for in cash, funded through existing reserves and borrowing, SK Hynix said.

The founding company of SK Hynix was originally part of the Hyundai group, one of the family-controlled conglomerates known as chaebol that dominate business in the world's 12th-largest economy.

It has since grown to become a major company in its own right and is the second most valuable company listed on Seoul's KOSPI stock market.

In early trade, its shares were down 2.08 percent on the announcement.

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