SK hynix is expected to finalize the acquisition of Intel's NAND flash and solid-state drive (SSD) business as early as this month, about three years after completing the first phase of the acquisition in 2021.
According to the semiconductor industry on the 19th, SK hynix is set to pay the remaining balance of $2.235 billion (approximately 3.23 trillion KRW) to Intel by the 31st. Upon completion of this acquisition, SK hynix will secure Intel's rights to operate its Dalian, China factory, intellectual property (IP) related to semiconductor design and manufacturing, and research and development (R&D) personnel.
Earlier, in October 2020, SK hynix announced its decision to acquire Intel's NAND business for a total of $9 billion (approximately 12 trillion KRW). In the first phase of the acquisition in 2021, SK hynix paid the first installment of $7 billion (approximately 9.3 trillion KRW) and secured the rights to operate the core business. After receiving approval from various regulatory authorities and completing the subsequent procedures, the final acquisition is set to be completed.
With this acquisition, SK hynix is expected to further solidify its position in the enterprise SSD (eSSD) market. SSDs are data storage devices that use NAND flash memory as a medium, and they are seeing increasing demand in data centers and enterprise storage markets due to their fast speeds and high durability. In particular, according to market research firm Omdia, the enterprise SSD market is growing at an annual rate of over 10%. SK hynix, which has already had a strong presence in the consumer SSD market, plans to use this acquisition to enhance its competitiveness in high-performance eSSDs for servers and data centers, thereby expanding its market share.
SK hynix is expected to strengthen its relationships with major global customers, including those in the U.S. and China, through its U.S. subsidiary, "Solidigm." Solidigm has secured key data center customers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. Last year, Solidigm recorded a revenue of 8.8488 trillion KRW, representing a 193.9% growth compared to the previous year, and it is expected to play a pivotal role in expanding SK hynix's presence in the eSSD market moving forward.
The semiconductor industry views SK hynix's acquisition positively. An industry insider commented, "As the NAND flash market is highly competitive, with companies like Samsung Electronics, Kioxia, and Western Digital, SK hynix's full absorption of Intel's NAND business is expected to enhance its global competitiveness even further."
However, even after the acquisition is completed, there remains the challenge of technology integration. Intel has been using the "floating gate" process, while SK hynix has adopted the "charge trap flash (CTF)" method. The floating gate method offers higher stability but has the drawback of difficulty in implementing high-density structures beyond 200 layers. An industry insider commented, "The fundamental memory cell structures of the two processes are different, so integrating the production systems will be crucial," adding, "To ensure stable production, a strategy that operates both methods may need to be considered."
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