The transaction has been approved by China and SK Hynix is acquiring Intel’s NAND business for $7 billion. They now own the factory in Dalian, China, and the Solidigm brand will be created to run the SSD business and will be based in the United States.
The Korean memory maker already has the okay from the authorities, so it now owns Intel’s NAND business. However, the acquisition completes the first phase, so a second phase will follow in which all Intel NAND intellectual property, factory workers, and remaining assets will be transferred.
SK Hynix aims to complete Intel acquisition by 2025
The second phase of the acquisition will not be completed until 2025, at which point Intel’s entire NAND business will belong to SK Hynix. The news focuses on the completion of the first phase of the acquisition, which ends with SK paying Intel $7 billion to acquire the bulk of the business.
In 2025, we will see the remaining assets of the NAND business – intellectual property on NAND flash wafer design and manufacturing, R&D workers, Dalian workers, and other assets – being passed on. While the workers are not owned by anyone, we expect SK Hynix to step into Intel’s position as an employer. At this stage, the purchase would be completed with the payment of $2 billion.
The total size of the deal is $9 billion. Another news is the creation of Solidigm, which will manage Intel’s SSD business. The company will be based in California and will be responsible for product development, sales, and manufacturing of SSDs. Its chairman will be Lee Seok-hee, who is also chairman of SK Hynix.
Thus, the president of SK Hynix will lead the merger processes, while Rob Crooke, the former president of Intel, will be the CEO of Solidigm. So the collaboration between Intel, Solidigm, and SK Hynix will be critical.
We have already reported on SK’s offer to Intel, which has finally materialized because the Korean memory maker sees the NAND flash business as a unique opportunity. It’s entirely possible that Solidigm’s services will focus on enterprise solutions (eSSD), but there’s nothing to say they won’t.
So far, Park Jung-ho, vice president and co-CEO of SK Hynix, has welcomed the Solidigm team to lead the entire “merger.” Various sources refer to this business transaction as a merger, although in my humble opinion it is more of an acquisition given the amount SK Hynix paid.
Why? Because of the word “transfer” or “ownership” in the context of the purchase, it appears that SK Hynix is acquiring ownership of the Intel SSD NAND business, including intellectual and industrial property. I would like to emphasize this because, in a merger, the two companies decide to combine their businesses by combining their assets and forming a new company.
While it is true that Solidigm is the new company that will take on this task, there is no balanced consideration as SK is paying a whopping $9 billion.