After NVIDIA announced its plan to acquire arm for us $40 billion and AMD negotiated a US $30 billion acquisition of Xilinx, the merger and acquisition between chip giants continued. On October 20,Sk Hynix announced on its official website that SK has signed an agreement with Intel on the acquisition of NAND flash memory and storage business, including NAND solid state disk business, NAND flash memory and wafer business, and Intel's NAND flash memory manufacturing plant in Dalian. Sk Hynix will pay Intel $9 billion in the deal.
According to the first financial reporter learned from people familiar with the matter, the negotiation of the acquisition has lasted more than a year. After accumulating a large amount of cash flow in the storage price rise cycle, Hynix intends to accelerate the pace of expansion, and the acquisition of Intel's Dalian plant can help Hynix to ensure production capacity and maintain market share.
"Previously, Japan's supply chain cut-off also made Hynix need to find capacity solutions." Said the person familiar with the matter.
People close to Intel told reporters the deal was a purely business decision.
In the view of analysts, the deal Intel and Hynix can "take what they need.".
Sheng Linghai, vice president of research at Gartner, told reporters that NAND is not the core business of Intel, and its profit margin has also fluctuated. There are 10 billion cash income from selling to SK, and SK can obtain technology and capacity.
It is understood that in Intel's business, 3D NAND business is far less famous than data center and PC business.
According to the financial report, most of Intel's flash chips are used to support data center business, and the external sales of 3D NAND belong to NSG (non volatile memory solutions group) business group. Due to the heavy investment in 3D NAND in the early stage, and the equipment of Dalian plant is still in the depreciation period, the profit situation of NSG business is not ideal. In 2016, 2017 and 2018, the NSG business lost US $540 million, US $260 million and US $5 million respectively, and the profit in 2019 was US $120 million.
In addition, according to the market share ranking of NAND flash in the first half of 2020, Intel ranks the last among the six major international storage manufacturers with only 11% share
For SK Hynix, the acquisition can not only quickly increase the production capacity, but also effectively enhance its NAND flash technical strength. The layout of overseas factories can also reasonably avoid the export restrictions of raw materials from Japan. Jibang consulting said that after SK Hynix obtained Intel's 3D NAND flash capacity, its competitiveness in the field of enterprise SSD will greatly increase. In the future, we should pay attention to how to balance the different product architectures of Intel and SK Hynix to achieve maximum benefits.