South Korea's second largest chipmaker SK hynix is buying U.S. tech giant Intel's NAND memory chip unit for over nine billion U.S. dollars.
SK hynix said on Tuesday that it has signed an all-cash deal which would make it the world's number two NAND flash chip manufacturer with around 20 percent of the market share.
NAND flash memory chips are primarily used to store data in devices such as smartphones, cameras and data centre servers.
The deal includes Intel's solid state drive or SSD business, as well as its NAND memory chip and wafer business and its production facility in Dalian, China.
The U.S. semiconductor producer has been looking to get out of the business mainly due to sagging prices for flash memory to focus on its core business of producing non-memory chips.
"Companies that produce non-memory CPU chips including Nvidia and AMD are very competitive and are threatening Intel's CPU market share which is Intel's core business."
But Intel will be keeping its Optane memory chip division, a smaller chip business which taps into advanced technology.
The acquisition will happen in stages and is expected to be completed in 2025.
"Intel's NAND flash technology has been jointly developed by Intel and Micron, so it has outstanding features. When merged with SK hynix's technology, synergy will be created which can propel SK hynix to catch up with its competitor Samsung."
He added that the aqcuisition of the factory in Dalian will expand SK hynix's market share in the NAND flash business.
It was the fourth-largest NAND flash producer with an ( 1) 11.7 percent market revenue share in the second quarter of 2020 according to market researcher TrendForce.
( 2) Intel had a roughly 11.5 percent share of market revenue.
SK hynix also is the world's second largest supplier in the DRAM business.
Eum Ji-young Arirang News.