Homepage Rankings and Research Companies Channelcast Marketing Matters CRNtv Events WOTC Cisco Partner Summit Digital 2020 Lenovo Tech World Newsroom HPE Zone The Business Continuity Center Masergy Zenith Partner Program Newsroom Dell Technologies Newsroom Fortinet Secure Network Hub Hitachi Vantara Digital Newsroom IBM Newsroom Juniper Newsroom The IoT Integrator Lenovo Channel-First NetApp Data Fabric Intel Tech Provider Zone

Confirmed: Intel In $9B Deal To Sell NAND Memory Biz To SK Hynix

The deal means Intel is getting out of the NAND SSD business while retaining its Intel Optane products. ‘For Intel, this transaction will allow us to further prioritize 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,’ CEO Bob Swan says.

It’s official: Intel is selling its NAND memory and storage business to South Korean chipmaker SK Hynix for $9 billion, which means the company will part ways with its NAND SSD product line.

SK Hynix announced the deal Tuesday local Korean time, saying that it will acquire Intel’s NAND SSD business, NAND component and wafer business and the company’s NAND memory manufacturing plant in Dalian. The announcement noted that Intel will retain its Intel Optane brand of products, which is based on the 3D XPoint technology it developed with Micron.

[Related: The Rumored $30B AMD-Xilinx Acquisition: 5 Big Things To Know]

In the joint announcement, the companies said SK Hynix will acquire the NAND SSD business, along with associated technology IP and employees in addition to the Dalian plant, for $7 billion once the deal is approved by regulators, which they expect to happen in late 2021.

The final deal is expected to close in March 2025, which is when Intel is expected receive $2 billion from SK Hynix in exchange for the remaining assets, which will include technology IP related to the manufacture and design of NAND flash wafers as well R&D employees and the Dalian factory workforce. Until then, Intel will continue to manufacture NAND wafers at the Dalian plant.

Intel plans to use the proceeds to the $9 billion NAND deal to invest in products and long-term growth priorities, including AI, 5G networking and the “intelligent, autonomous edge,” according to the joint announcement from the two companies.

“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,” Intel CEO Bob Swan said in a statement. “For Intel, this transaction will allow us to further prioritize 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.”

SK Hynix said the acquisition will make it more competitive in the storage market, particularly in the realm of enterprise SSDs. The company highlighted Intel’s “industry-leading” NAND SSD technology and quadruple level cell NAND flash products and how Intel’s NAND businesses generated $2.8 billion in revenue for the Non-Volatile Solutions Group and contributed roughly $600 million in operating income for the first six months of 2020.

“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,” said Seok-Hee Lee, CEO of SK Hynix, 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.”

The deal was announced several hours after two news reports said that such an agreement was imminent.

An executive at a solution provider company that partners with Intel said the decision is not surprising, given that Intel is far from being the biggest player in the SSD market. According to storage news site Blocks + Files, Intel’s NAND flash revenue was 11 percent of the total market in the second quarter, putting it behind SK Hynix, Micron, Western Digital, Toshiba and Samsung.

“It‘s a judgment call that takes advantage of the opportunity to get a fair multiple [on the overall value of the business for a return on investment] because they made money,” the executive said. “And it’s a business segment they cannot dominate. This goes into, if you’re Intel, do you want to be in a business segment you cannot dominate? Historically, the answer is no.”

Back to Top



trending stories

sponsored resources