SK Hynix to acquire Intel's NAND flash memory business for $9 billion

On October 20, 2020, SK Hynix and Intel jointly announced the signing of an acquisition agreement on October 20, Korean time. According to the agreement, SK Hynix will acquire Intel's NAND flash memory and storage business for US$9 billion.

The acquisition includes Intel's NAND SSD business, NAND components and wafer business, and its NAND flash memory manufacturing plant in Dalian, China. Intel will retain its unique Intel OptaneTM business.

SK Hynix and Intel will strive to obtain the required government licenses by the end of 2021. After obtaining the relevant licenses, SK Hynix will acquire the NAND SSD business (including NAND SSD-related intellectual property and employees) and the Dalian factory from Intel by paying the first installment of US$7 billion.

After that, SK Hynix will pay the remaining US$2 billion to acquire the remaining related assets from Intel, including intellectual property rights related to the production and design of NAND flash wafers, R&D personnel, and employees of the Dalian factory, at the final delivery date expected in March 2025. According to the agreement, Intel will continue to manufacture NAND wafers at the Dalian Flash Manufacturing Plant and retain the intellectual property (IP) related to the manufacture and design of NAND flash wafers until the final delivery date.

Through this acquisition, SK Hynix aims to enhance its competitiveness in storage solutions including enterprise-class SSDs in the rapidly growing NAND flash memory sector and further advance into one of the industry's leading global semiconductor companies. SK Hynix expects that this transaction will enable SK Hynix to develop its memory ecosystem, thereby bringing more benefits to customers, partners, company employees and shareholders.

As a world leader in the semiconductor industry, Intel has industry-leading NAND SSD technology and quadruple level cell (QLC) NAND flash product lines. As of June 27, 2020, Intel's NAND business generated approximately $2.8 billion in revenue and approximately $600 million in operating profit for Intel's Non-volatile Memory Solutions Group (NSG) in the first half of this year.

SK Hynix successfully developed the world's first 96-layer 4D NAND flash memory based on Charge Trap Flash (CTF) in 2018, and developed 128-layer 4D NAND flash memory in 2019. SK Hynix will combine Intel's storage solution-related technologies and production capabilities to create a series of high-value-added 3D NAND solutions including enterprise-level SSDs.

Intel plans to use the proceeds from this transaction to develop industry-leading products and strengthen its focus on businesses with long-term growth potential, including artificial intelligence (AI), 5G networks and intelligent, autonomous driving-related edge devices.

Intel and SK Hynix will work together to ensure a seamless transition for customers, suppliers and all employees. The two companies will maintain their close partnership, including in the area of ​​DDR5, to meet the needs of the growing memory-based semiconductor ecosystem.

SK hynix CEO Lee Seok-hee said, “I am pleased to see that SK hynix, which leads NAND flash memory technology innovation, and Intel’s NAND division will work together to create a new future. By leveraging the technologies and strengths of both parties, SK hynix will proactively respond to various customer needs and optimize its corporate structure to establish an innovative product lineup in the NAND flash memory field at the same level as the DRAM business.”

Intel CEO Bob Swan emphasized: "I am proud of the NAND flash business we have built and believe that the combination with SK Hynix will help the development of the memory ecosystem and bring more benefits to customers, partners and all employees. For Intel, this transaction will enable us to focus more on investing in differentiated technologies, so that we can play a more important role in the success of our customers and produce substantial returns for our investors."