Intel Nears Deal to Sell NAND Memory Unit to SK Hynix

        Intel<span class="company-name-type"> Corp.</span>

    INTC <span>0.60%</span>

  SK Hynix of South Korea to enter into a deal to sell memory-chip unit<span class="company-name-type"> Inc.</span>

    000,660 <span>1.64%</span>

  For roughly $ 10 billion, the move that revived the semiconductor giant away from the region of historical importance has been increasingly challenged.

The companies are discussing the deal as soon as an announcement can be made on Monday, according to people familiar with the matter, assuming the talks do not drop at the last minute. The specifics of the transaction in which SK Hynix is ​​buying cannot be learned.

The Intel unit uses NAND flash memory products primarily in devices such as hard drives, thumb drives, and cameras. The US chipmaker has been going out of business for some time, driven by price increases for flash memory.

While Intel is known for making central processing units at the center of personal computers, the company has deep roots in the memory business. It started as a memory maker in the late 1960s, with the company changing course due to stiff competition from Japan’s gurgling electronics industry in the 1980s.

The market for memory chips slipped between monitoring devices in 2018, though it began recovering at the end of last year. Analysts believe that the NAD devices market is expected to remain strong in the coming years as there is a surge in data storage.

However, Intel chief executive Bob Swan said in April that the company had to generate more lucrative returns from Nanda’s business and suggested it could enter into a “partnership” to do so.

George Davis, the chief financial officer of the California-based company, said in March when there was a growing market for flash memory in huge data centers. “We have not been able to take the kind of returns that we want to see,” he said.

Intel had already reduced its participation in memory manufacturing at Micron Technology in January Inc.

Mu 2.31%

Purchased Intel’s stake in the joint venture for approximately $ 1.5 billion. The venture was focused on an advanced memory technology called 3D XPoint.

Intel, which has a market value of about $ 230 billion, is under increased pressure as smaller rivals gain market share. Its stock is down nearly 10% this year compared to a nearly 30% increase in the PHLX Semiconductor Index. Shares fell more than 15% when Intel indicated in July that second-half results would be weaker than expected and further delays would be revealed in the rollout of its Superfast seven-nanometer chip technology, which future generations of central processing units Affects the

While Intel has struggled to advance in mass production of its most advanced chips, according to Mercury Research, rival Micro Devices Inc.’s market share in personal computer CPUs exceeded 17%, up from five years ago. Was more than double. . Intel holds all the remaining market share.

Intel is set to report its third quarter earnings on Thursday afternoon.

To halt the rise of China’s tech industry and the country’s leading telecom equipment manufacturer Huawei Technologies Co. The market for memory chips has been shaken by US efforts to restrict exports to Chinese firms such as. A consortium led by private-equity firm Bain Capital, owned by Japanese memory-chip maker Kioxia Holdings Corp., delayed one of this year’s most awaited public offerings due to the situation last month.

The technological battle between the US and China has hit Tiktok and Huawei and shocked American companies producing and selling in China. The WSJ describes how Beijing is pouring money into high-tech chips because it wants to become self-sufficient. Video / Illustration: George Downs / The Wall Street Journal

Intel’s Advanced Flash Memory, referred to as 3D NAND because it has multiple layers of memory cells piled on top of each other, is built in Dalian, China, on the Liaodong Peninsula west of the Korean Peninsula But there is a port city.

The factory is Intel’s only major chip-manufacturing site in China and if it is included in sales, it will severely decrease the company’s presence.

The US recently required companies to obtain licenses before exporting some technology to China’s most advanced chip maker, Semiconductor Manufacturing International SMICY. 2.63%

L Corp

Consolidation has swept through the semiconductor sector as industry players scale and expand their product portfolio to support the growing number of everyday items connected to the Internet.

Analog device Inc.

In July, Maxim agreed to pay more than $ 20 billion for integrated products Inc.

And nvidia Corp.

In September, British chip designers backed by SoftBank Group agreed to pay $ 40 billion for Arm Holdings Corp.

AMD rival negotiating to buy chip maker Xilinx Inc.

The Wall Street Journal reported earlier this month. According to people familiar with the matter, the two sides are discussing the deal which may come together this week or the next day.

Some companies want to focus and reduce their focus. Broadcom Inc.

Last year, its radio-frequency, or RF, unit, a segment of its wireless-chip business, was discovered that makes filters used in cell phones to clarify signals. Later decided against selling it.

Write Cara Lombardo at [email protected] and Dana Cimilluca at [email protected]

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