- South Korean maker is projected to secure more than 20% market share, behind Samsung.
- The industry is consolidating fast as Nvidia and AMD revealed its acquisition plans.
- Intel CEO aims to divest non-core businesses.
- Deal going to elevate SK Hynix’s competitiveness in enterprise SSD market.
Dubai: South Korean flash memory chipmaker SK Hynix’s acquisition of Intel’s NAND Flash business and Dalian-based Fab 68 for $9 billion is set to propel it to become second largest globally, behind Samsung.
The deal is expected to be closed in March 2025.
However, the acquisition pertains only to Intel’s relevant 3D NAND Flash technologies and capacities and does not include its 3D-XPoint memory technology, which has recently received much attention in the market.
The semiconductor industry is rapidly consolidating as Nvidia said it would acquire UK-based chip designer Arm for $16 billion and AMD is in talks to buy Xilinx for more than $30 billion.
The $9 billion deal is the biggest acquisition to date for the Korean maker after its $3.7 billion investment in Japanese rival Kioxia in 2017.
“This transaction will allow us to further prioritise our investments in differentiated technology,” Intel CEO Bob Swan said in a statement.
Swan has told investors he plans to divest non-core businesses. The company earlier sold its 5G modem business to Apple.
Competition set to intensify
Research firm TrendForce said that the acquisition of Intel’s 3D NAND Flash capacity will massively elevate SK Hynix’s competitiveness in the enterprise SSD market.
“SK Hynix is projected to secure more than 20 per cent of NAND Flash market share after it acquires Intel’s production capacity, in turn surpassing second-place Kioxia and ranking SK Hynix right behind market leader Samsung,” it said.
According to data compiled by TrendForce, Samsung is the leader in the NAND flash market with a 31.4 per cent share, followed by Kioxia with 17.2 per cent SK Hynix at 11.7 per cent and Intel with 11.5 per cent, in terms of revenue, in the NAND Flash market in the second quarter, placing the two companies in fourth and sixth places, respectively.
In terms of product competitiveness, SK Hynix has an advantage in the mobile market, including eMCP and eMMC products, accounting for more than 60 per cent of SK Hynix’s total NAND Flash revenue in 2019.
On the other hand, Intel has been performing superbly in the enterprise SSD market.
Not only is Intel on par with Samsung in enterprise SSD, but it has also captured more than 50 per cent of the Chinese market.
Enterprise SSD yields the highest profitability among the entire range of the company’s NAND Flash end-products.
In terms of production capacity, all of SK Hynix’s current NAND Flash wafer inputs are located in South Korea, whereas Intel’s NAND Flash capacity is entirely located in Dalian, China.
Among all NAND Flash suppliers, Intel is the most committed to the promotion of QLC architecture adoption, and QLC SSD is expected to occupy more than 30 per cent of its NAND Flash bit output by the end of this year.