Data Backup Digest

While Intel remains one of the biggest names in the IT industry, it's hard to ignore the steps they've been taking to downsize over recent years. Not only did they make headlines in 2019 when they struck a deal with Apple to sell their digital cellular modem division, but they also sold their home connectivity chips division to MaxLinear in early 2020.

But they're making headlines once again by selling their entire memory storage division; this time in a deal with South Korea-based SK Hynix for approximately $9 billion. Although this deal isn't all bad news for Intel – as their memory storage division reportedly made zero profit in 2019, but this deal, along with the other recent moves, could be a sign of even bigger problems.

Examining the Deal

The recent deal, which is set to take place over the course of various phases that will last throughout 2025, includes any solid-state drives (SSDs), NAND flash chips, and storage wafers that Intel currently manufactures. In addition, a production facility located in the city of Dalian, China, is also included in the deal.

Seok-Hee Lee, chief executive officer (CEO) with SK Hynix, spoke enthusiastically about the recent acquisition by saying: "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."

Bob Swan, CEO with Intel, shared in Lee's optimism and enthusiasm by saying: "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."

It's clear from their CEO's statement that Intel has nothing but the best intentions regarding their memory storage division, their shareholders, their customers, and even the future of their entire business.

'''What's in it for SK Hynix?'''

Although many experts believe that Intel might be getting a better deal in the long run, SK Hynix has a lot to gain, too. As they continue to ramp up their own production efforts in the wake of COVID-19, they've effectively shutdown one of their largest competitors.

Moreover, the recent acquisition will play a significant role in SK Hynix surpassing their second-biggest rival, Kioxia, within the NAND flash memory market. It will also help them achieve and maintain status as a major name in the global semiconductor business.

They'll likely achieve this by integrating their own proprietary technology, including the Charge Trap Flash (CTF)-based, 96-layer 4D NAND flash architecture in 2018 and a separate, 128-layer 4D NAND flash architecture in 2019.