This operation comes from afar. Intel and South Korean company SK Hynix agreed in October 2020 that the latter would take over the former’s NAND memory business. The deal also includes components for SSD drives, wafers, and also the memory chip manufacturing plant that Intel has in Dalian (China), known as Fab 68.
Since then, more than a year has passed, and the operation is going to be formalized now. The reason it has been delayed is that this purchase agreement it had to be previously approved by antitrust agencies in the markets in which these companies operate, and although US, European and South Korean authorities have long supported the operation, approval from China was still pending.
Hynix has promised not to reach any agreement with its Chinese competitors to exercise effective control of the market that nullifies legitimate competition.
And it just arrived today, although with conditions. The authorities of this gigantic Asian country have given the green light to the purchase, but Hynix has promised to supply its NAND chips for SSD units with PCI Express and SATA interfaces at reasonable and competitive prices that do not allow it to adopt a position of dominance compared to other competitors with a more modest presence in the storage market.
In addition, Hynix has also agreed not to promote any decision that forces Chinese consumers to buy its products or those of other companies controlled by the South Korean company. And, of course, it has also promised not to reach any agreement with its Chinese competitors for exercise effective market control that nullifies the legitimate competition that should prevail for the benefit of consumers.
This operation is an accolade for Hynix, which is determined to close on Samsung’s heels.
The South Korean company will pay Intel $ 7 billion during the first phase of the purchase consolidation process, and the remaining $ 2 billion will be added to Intel’s coffers in March 2025. However, the latter company has been left with a important part of your business: the division that is in charge of the development of the Optane memories, which is nothing more than an alternative to SSD drives that this company wants to keep as a long-term bet.
However, it is clear that Hynix would not have taken this step forward if it was not very clear that buying this division of Intel is going to have a profound and positive impact on its business. In fact, according to the consultancy TrendForce The operation that it has closed with Intel will allow this brand to increase its share in the NAND flash memory market beyond 20%. It is not but not bad.
The rival to beat in this industry is Samsung. According to the consultant Statista the latter company leads this market with a 34% share. Kioxia and WDC are currently some way behind, with 18.3 and 14.7% respectively. And in fourth position we already ran into Hynix, with 12.3%. Nevertheless, this status is about to changeYes, as TrendForce has predicted, this acquisition catapults the latter company’s market share beyond 20%. Samsung is still a long way off, but much less than before.
Cover image | Intel