Intel poised to sell NAND business to South Korea’s SK Hynix for almost $10 billion: sources

In this news, we discuss the Intel poised to sell NAND business to South Korea’s SK Hynix for almost $10 billion: sources.

(Reuters) – Intel Corp INTC.O is preparing to sell its NAND memory chip business to SK Hynix Inc 000660.KS for nearly $ 10 billion in deal that would propel South Korean chipmaker in second place in the world rankings, two sources familiar with the matter said.

The deal would see SK Hynix overtake Japan’s Kioxia as No. 2 player in the NAND memory market, and close the gap with market leader Samsung Electronics Co Ltd 005930.KS as the switch to working from home increases the demand for chips used in tablets and servers.

Intel is reportedly selling its SSD business in the United States and its factory in Dalian, China, which produces advanced flash memory called 3D NAND, the sources told Reuters on Monday. The company would keep XPoint, its advanced memory technology unit, they said.

The deal would allow Intel to focus on its remaining memory business, one of the sources said. The person said the deal could be announced as early as Monday in the United States or Tuesday in South Korea, although a final decision has not been made.

Another person said the deal will be an all-cash transaction.

Intel did not immediately respond to requests for comment from Reuters, while SK Hynix declined to comment.

PANDEMIC DEMAND

The Nand Flash industry grew between April and June thanks to strong demand for PCs and servers, with the COVID-19 pandemic forcing millions of people to work from home, according to market researcher Trendforce.

Hynix, which counts Apple and Huawei as customers, is a distant fourth in the NAND memory chip market, although it ranks second after Samsung Electronics in DRAM memory sales.

Samsung is the market leader in NAND flash with a 31.4% share, followed by Kioxia with 17.2%, SK Hynix with 11.7%, and Intel and Micron MU.O with 11.5% each.

With the acquisition, SK Hynix, which is part of the South Korean conglomerate SK Group, would have a 23.2% market share, thereby closing the gap with rival Samsung Electronics.

The Wall Street Journal reported earlier that the deal could be announced Monday in the United States. Intel shares rose nearly 3% after the report.

Reporting by Krystal Hu in New York, Hyunjoo Jin in SEOUL, Ayanti Bera in Bengaluru; Editing by Maju Samuel and Stephen Coates

Original © Thomson Reuters

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