(Reuters) – Intel Corp <INTC.O> is preparing to sell its NAND memory chip business to SK Hynix Inc <000660.KS> for almost $10 billion in a deal that would propel the South Korean chipmaker to second in the global rankings, two sources familiar with the matter said.
The deal would allow SK Hynix to overtake Japan’s Kioxia as the No.2 player in the NAND memory market, and narrow the gap with market leader Samsung Electronics Co Ltd <005930.KS> as the shift to work-from-home boosts demand for chips used in tablets and servers.
Intel would sell its solid-state drive business in the United States and its factory in Dalian, China, which produces advanced flash memory, referred to as 3D NAND, the sources told Reuters on Monday. The company would keep XPoint, its advanced memory technology unit, they said.
The deal would allow Intel to focus on its remaining memory business, Optane, one of the sources said. The person said the deal could be announced as early as Monday in the United States or Tuesday in South Korea, although a final decision had not been made.
Another person said the deal would be an all-cash transaction.
Intel did not immediately respond to Reuters’ requests for comment, while SK Hynix declined to comment.
PANDEMIC-DRIVEN DEMAND
The Nand Flash industry grew in the April-to-June quarter thanks to robust demand for PCs and servers as the COVID-19 pandemic forced millions of people to work from home, according to market researcher Trendforce.
Hynix, which counts Apple and Huawei as customers, is a distant fourth in the NAND memory chip market, although it ranks second after Samsung Electronics in DRAM memory sales.
Samsung is the leader in the NAND flash market with a 31.4% share, followed by Kioxia with 17.2%, SK Hynix with 11.7%, and Intel and Micron <MU.O> with 11.5% each.
With the acquisition, SK Hynix, part of South Korean conglomerate SK Group, would have a market share of 23.2%, narrowing the gap with cross-town rival Samsung Electronics.
The Wall Street Journal reported earlier that the deal could be announced on Monday in the United States. Intel’s shares were up nearly 3% after the report.
(Reporting by Krystal Hu in New York, Hyunjoo Jin in SEOUL, Ayanti Bera in Bengaluru; Editing by Maju Samuel and Stephen Coates)
The post Intel poised to sell NAND business to South Korea’s SK Hynix for almost $10 billion: sources appeared first on Morningology.
