Intel Agrees To Sell Most Of Its Memory Chip Business To SK Hynix For $9 Billion

Intel said it has agreed to sell the majority of its memory chip business to South Korean memory semiconductor supplier SK Hynix for $9 billion.

The deal will make SK Hynix one of the world’s biggest NAND memory makers, the Wall Street Journal noted.

The assets to be sold comprise the Intel NAND memory and storage business, including the NAND SSD (solid state drive) business, the NAND component and wafer business, and the Dalian NAND memory manufacturing facility in northeastern China.

NAND is a kind of non-volatile flash memory. Digital cameras, USB flash drives, smartphones, and SSDs use NAND flash memory for storage.

According to research firm TrendForce, SK Hynix and Intel had a combined NAND memory market share of more than 20% in the second quarter. South Korea’s Samsung Electronics Co. was the top player with more than 30% of the global market.

Under terms of the agreement, Intel will continue to make NAND wafers at the Dalian facility and retain all intellectual property related to the manufacture and design of NAND flash wafers until the final closing.

Intel will, however, retain its Intel Optane memory storage business, which is widely used in data centers.

For the first six months of the year, the NAND businesses being sold to SK Hynix accounted for about $2.8 billion of the revenue for Intel. But Intel, the Journal reported, has been seeking to exit the flash memory business due to falling prices in the sector.

The proposed transaction remains subject to government approvals – with a final closing expected in 2025.

Intel shares have dropped 10% this year, while the Philadelphia Semiconductor index has surged 30%.