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Officially: Intel will sell flash memory production to SK Hynix for $ 9 billion
Intel won’t slam the door out of the NAND flash business. Today, it signed an agreement to sell this entire area to the South Korean company SK Hynix for $ 9 billion, but will completely stop the production of NAND and SSD chips only after five years – in 2025. Therefore, the deal with SK Hynix, if government regulators do not mind, will take place in two stages and will be extended for a decent period.
The approval of the deal, and on this issue, the last word will be with China, because Intel’s NAND plant is located in the city of Dalian, it is expected in about a year – at the end of 2021. Intel is interested in the favor of the Chinese side, and the Chinese side is interested in Intel technologies and in reducing the sanctions pressure. From this tangle of mutual interests, something useful for each of the parties can turn out.
If the deal is approved, SK Hynix will pay for Intel’s purchase of Intel’s NAND flash SSD design and manufacturing business, including intellectual property, as well as the engineering and plant personnel of the Dalian factory, as well as the factory itself (lines for the release of SSD).
Final transaction of $ 2 billion expected in March 2025. For this operation, Intel will give the Koreans intellectual property for the production of NAND memory and lines for processing silicon wafers, including developers and factory workers. SK Hynix will receive all related Intel designs and full rights to use them. Until that time, the rights will remain with Intel, and the company will not stop producing NAND in its own interests.
I must say that in a similar way, Intel got rid of the production of NOR-flash memory. Not immediately, but within about five years. She was once the market leader for NOR-flash memory, which was used as memory in phones and handhelds. In 2021, Samsung for the first time bypassed Intel in this market and from 2021 Intel began to gradually move away from independent production of NOR flash memory, switching to the production of NAND memory in conjunction with Micron in 2021.
Now is the time when Intel is sending NAND memory production to the dustbin of history. She will keep the production of 3D XPoint memory and Optane drives. The company will use the proceeds from the sale of the NAND business to strengthen “new growth points”: AI, machine vision, 5G, robotics. As for SK Hynix, it has a chance to become the world’s second largest manufacturer of NAND memory. If it integrates NAND production and Intel customers without loss, then its market share may exceed the share of KIOXIA (ex-Toshiba) and exceed 23% (taking into account the current situation). However, before that, a whole five years will pass and it is not yet known how the Chinese manufacturers of NAND will show themselves.