Components & Peripherals News
Intel’s $9B NAND SSD, Memory Sale To SK Hynix: 6 Big Things To Know
CRN dives deep into the details of Intel’s NAND SSD divestiture, how it will help SK Hynix, which Intel products it will impact and what it means for Intel’s Optane business.
The Details Of The Deal
Under the deal, Intel will sell SK Hynix its NAND SSD business, NAND component and wafer business and NAND memory manufacturing plant in Dalian, China, but the transfer of assets and employees won’t happen all at once.
Instead, the first transfer and closing is expected to happen in late 2021, though it can’t happen prior to Nov. 1, 2021, according to the master purchase agreement that Intel filed with the U.S. Securities Exchange Commission on Tuesday.
The first transfer to SK Hynix will include Intel’s NAND SSD business, along with associated technology IP and employees in addition to the Dalian plant, for which Intel will receive $7 billion. But this can only happen if both companies secure approvals from regulators, among other customary conditions.
The second transfer and closing is expected to happen in March 2025, which is when Intel is expected to 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.
Among the bodies Intel and SK Hynix will require approval from are the Committee on Foreign Investment in the U.S., the Federal Trade Commission and the U.S. Department of Justice as well as regulators in the People’s Republic of China and certain other foreign jurisdictions.
If the deal falls apart, Intel or SK Hynix may be required to pay a multi-million-dollar termination fee depending on the circumstances. For SK Hynix, if the deal terminates due to specific circumstances related to government approvals or SK Hynix fails to close, it will have to pay Intel a $350 million termination fee if it happens before the first closing or $100 million after the first closing. For Intel, if the deal is terminated due to legal challenges or Intel fails to close on the deal, Intel will have to pay SK Hynix a $140 million termination fee before the first closing or $40 million after the first closing.