Intel sells its NAND flash memory business to SK Hynix for €7.59B; will focus more on 5G and AI

When some of the biggest companies in the world conduct business, it results in shifting billions of dollars. One such gargantuan deal has gone through and SK Hynix, one the biggest chip makers in the world, has bought Intel’s NAND flash memory and storage business. The South Korean chip manufacturer, SK Hynix, will pay a total sum of  €7.59B to Intel, as part of the deal. 

SK Hynix to acquire Intel’s Dalian NAND memory manufacturing facility in China

The transaction includes Intel’s NAND SSD business and the NAND component and wafer business. Additionally, the company will now be in control of Intel’s NAND memory manufacturing facility, which is located in Dalian, China. Do note that Intel still owns and retains its Optane business, which is also a form of storage. 

Both SK Hynix and Intel will now seek governmental approvals, which are expected to happen in late 2021. Post this, the former will make an initial payment of €5.9B to acquire Intel’s NAND SSD business, which includes NAND SSD-associated IP and employees, as well as the Dalian facility. 

Later on in March 2025, SK Hynix will acquire Intel’s remaining assets. This will include IP related to the manufacture and design of NAND flash wafers, R&D employees, and the Dalian fab workforce. This will happen as the deal finally closes, with the final payment of €1.69B, in March 2025. The deal also allows Intel to retain all IP related to the manufacture and design of NAND flash wafers and continue to manufacture NAND wafers at its Dalian Memory Manufacturing Facility, until the final closing.

Intel to focus more on 5G and AI

With this deal, SK hynix looks to “enhance the competitiveness of its storage solutions” including enterprise SSDs in the NAND space. Intel, however, will be investing the proceeds from this deal to focus more on artificial intelligence, 5G networking and the intelligent, autonomous edge. This major deal comes after Intel sold its modem business to Apple for about €840M. 

According to the statement, “For the first six months ended June 27, 2020, the NAND businesses represented approximately US $2.8B (nearly €2.36B) of the revenue for Intel`s Non-volatile Memory Solutions Group (NSG) and contributed approximately US $600M (approx €506M) to NSG operating income.”

Bob Swan, Intel CEO says, “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. 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.”