Marching on the road to become the largest memory chipmaker in the world, SK Hynix has announced that it will acquire Intel’s NAND memory and storage business for $9 billion. The deal includes the acquisition of Intel’s NAND SSD business, the NAND component and wafer business, as well as the Dalian NAND memory manufacturing facility in China.

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

The South Korean memory and semiconductor company aims to improve its position in the storage solutions market with this acquisition. SK Hynix expects the deal would “enable SK Hynix to grow the memory ecosystem to the benefit of customers, partners, employees and shareholders”. The company notes that the industry-leading technology of Intel’s NAND SSD and quadruple level cell (QLC) NAND flash products, would help the Korean chipmaker give a tough competition to Samsung in the memory chip market.

Sk Hynix recently announced the world’s first DDR5 RAM chips,  which will provide twice the performance of the DDR4 chips that dominate the market today.

On the other hand, Intel will use the capital from the deal to further invest in its “long-term growth priorities”. The company has been on an endeavor to develop its own artificial intelligence, 5G networking and an intelligent, autonomous edge over its competition. In 2019, it sold off its modem business to Apple for $1 billion to put more focus on its development of 5G networking.

“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,” said Bob Swan, Intel CEO.

As part of the deal, Intel will retain its Optane business which produces SSD memory modules. The deal is expected to receive government approvals by late 2021. Following the approvals, SK Hynix would immediately take over Intel’s NAND SSD business, which includes NAND SSD-associated IP and employees, as well as the Dalian memory manufacturing facility, with the first installment of $7 billion. The rest of the assets, that include IP related to the manufacture and design of NAND flash wafers, R&D employees, and the Dalian fab workforce, will be handed over to SK Hynix in a final closing expected in March 2025 with a payment of the remaining $2 billion.

SK Hynix said in a blog post, the transaction will occur in a very seamless transition for suppliers, employees and customers. Moreover, Intel will continue manufacturing NAND wafers at the Dalian Facility and hold the IP related to the manufacture and design of NAND flash wafers until the final closing is completed in 2025.