The world’s second-largest chipmaker SK Hynix announced a deal with Intel to buy its entire NAND Flash Memory operation. The move is seen as a means to alleviate its position against its rival Samsung Electronics, which is the top contender in the NAND and DRAM chips market.
The South Korean chipmaker announced that it will pay $9 billion for “Intel NAND memory and storage business, which includes the NAND SSD business, the NAND component and wafer business, and the Dalian NAND memory manufacturing facility in China”. Intel will be retaining its Optane business.
SK Hynix ranks second globally in DRAM chips manufacturing, which is used in computers and servers. It used to lag behind in the flash memory space, which are generally used in smartphones and USB drives, where the company ranked fourth in global NAND sales. Intel was ranked sixth in the same.
The deal will expand the market share of SK Hynix to 23%, making it the second runner in the NAND flash memory market, according to Trendforce.
The duo will be supplying chips to American tech giants like Apple, Dell and HP, along with other Chinese companies. The combination would further alleviate the company’s position over Japan’s Kioxia and United States’ Western Digital.
The government approval for the deal is pending, but both the companies expect to close the deal by late 2021. Intel further plans to invest the transaction proceedings in leadership products, long-term projects, including artificial intelligence, 5G networking and the intelligent, autonomous edge.