Intel on Tuesday said it has signed an agreement to sell its NAND memory and storage business to South Korean chipmaker SK hynix for $9 billion.
The transaction includes the NAND SSD business, the NAND component and wafer business, and the Dalian NAND memory manufacturing facility in China.
With this acquisition, SK hynix aims to enhance the competitiveness of its storage solutions, including enterprise solid-state drives (SSDs), in the rapidly growing NAND flash space, and further aims to leap forward as one of the leading global semiconductor companies in the industry.
"I am pleased to see SK hynix and Intel's NAND division, which have led the NAND flash technology innovation, work to build the new future together," Seok-Hee Lee, CEO of SK hynix, said in a statement.
"By taking each other's strengths and technologies, SK hynix will proactively respond to various needs from customers and optimize our business structure, expanding our innovative portfolio in the NAND flash market segment, which will be comparable with what we achieved in DRAM."
SK hynix and Intel said the required governmental approvals for the deal are expected in late 2021.
Following receipt of these approvals, SK hynix will acquire from Intel the NAND SSD business (including NAND SSD-associated intellectual property and employees), as well as the Dalian facility, with the first payment of $7 billion.
SK hynix will acquire from Intel the remaining assets, including IP related to the manufacture and design of NAND flash wafers, R&D employees, and the Dalian fab workforce, upon a final closing, expected to occur in March 2025 with the remaining payment of $2 billion.
As per the agreement, Intel will continue to manufacture NAND wafers at the Dalian memory manufacturing facility and retain all IP related to the manufacture and design of NAND flash wafers until the final closing.
For the first six months ended June 27, the NAND businesses represented approximately $2.8 billion of the revenue for Intel's Non-volatile Memory Solutions Group (NSG) and contributed approximately $600 million to NSG operating income.
SK hynix said it will combine Intel's solutions technology and manufacturing capability in order to establish a higher value-added 3D NAND solutions portfolio including enterprise SSDs.
"I am proud of the NAND memory business we have built and believe this combination with SK hynix will grow the memory ecosystem for the benefit of customers, partners and employees," said Bob Swan, Intel CEO.
"For Intel, this transaction will allow us to further prioritise our investments in differentiated technology where we can play a bigger role in the success of our customers and deliver attractive returns to our stockholders."