South Korea’s SK Hynix said on December 22 that it had received a consolidated license from China’s State Administration for Market Regulation to acquire Intel Corp.’s NAND memory chip business.
This acquisition will help SK Hynix close the gap with the market leader in memory chips, Samsung Electronics
“SK Hynix sincerely welcomes and appreciates the approval of this deal by the State Administration of Market Regulation. SK Hynix will strengthen the competitiveness of the NAND Flash and SSD businesses by continuing the post-merger integration process,” SK Hynix said in a statement.
In October 2020, US chip giant Intel agreed to sell its NAND memory chip business to SK Hynix for $9 billion, part of a divestment to focus on the smaller but more profitable Optane memory business. use more advanced technology.
It is known that China’s market regulator did not simply approve the repurchase agreement, but included conditions. According to the agency, the concentration of PCIe and SATA hard drive businesses after the acquisition will have, or may have the effect of limiting competition in that market, so additional conditions are needed for the SK Hynix deal. – Intel.
Additional conditions include SK Hynix not supplying PCIe and SATA solid state drive products to the Chinese domestic market at an unreasonable price. The Korean memory chip company should continue to expand the production of PCIe and SATA enterprise-class solid-state drive products within 5 years from the effective date of the transaction. SK Hynix should not force customers in the China market to exclusively purchase products from SK Hynix or companies controlled by SK Hynix, nor should they enter into transactions with key competitors in China. to exclude or limit competition.
The deal is SK Hynix’s largest acquisition, as the company tries to ramp up production capacity of NAND chips used to store data in smartphones and data center servers, as well as strengthen its pricing power.
There has been speculation that SK Hynix will find it difficult to win China’s approval of the deal, or that any approval could be significantly delayed due to the complicated situation, especially the tension. America – China in the field of semiconductors. According to analysts, the deal will help SK Hynix close the gap with market leader in memory chips, Samsung Electronics.
“The Chinese approval came a bit later than the market expected, but it aligns with the company’s goal of getting approval from the Chinese regulator this year. The acquisition will likely help SK Hynix better expand its NAND solid-state drive (SSD) business to enterprise customers, as the company’s NAND SSD business is primarily focused on consumer products. consumer goods such as smartphones and PCs,” said Cape Investment & Securities analyst Park Sung-soon.