Intel Sells NAND Business To SK Hynix For $9 Billion

Intel has offloaded another business division, with the news that SK Hynix will pay $9 billion for the Intel NAND memory and storage business.

The announcement reveals that Intel is essentially offloading most of its memory business, including its Dalian NAND memory manufacturing facility in China.

Intel has been selling off non-core businesses of late. Last November it was said to be looking for a buyer for its connected home division, which makes chips found in home internet access equipment.

NAND sale

Intel in July 2019 also sold its smartphone modem business to Apple, in a deal valued at $1bn (£804m).

Intel is also known to have closed down its New Devices Group in 2018.

But now Intel has opted to offload its NAND memory and storage business to SK Hyni, but will keep its Optane memory products, particularly its DIMM memory modules, and said it would “invest transaction proceeds in long-term growth priorities.”

Both Intel and SK Hynix expect the deal to close the deal in late 2021, subject to relevant governmental approvals, for $7 billion.

SK Hynix will also 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, coupled with the remaining payment of $2 billion.

“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,” said the chip giant.

Intel said that for the six months ending 27 June, its NAND business had made approximately US $2.8 billion in revenue for its Non-volatile Memory Solutions Group (NSG).

SK Hynix said it would combine Intel’s solutions technology and manufacturing capability in order to establish a higher value-added 3D NAND solutions portfolio including enterprise SSDs.

Other investments

“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, chief executive officer (CEO) of SK Hynix.

“By taking each other’s strengths and technologies, SK Hynix will proactively respond to various needs from customers and optimise our business structure, expanding our innovative portfolio in the NAND flash market segment, which will be comparable with what we achieved in DRAM,” said Lee.

Intel however said it will use the funds to help it invest in other tech areas.

“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,” added 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,” he concluded.