Intel Corp (NASDAQ:INTC) is selling most of its flash memory business except Optane technology. The company sells the SSD business to South Korean memory chip maker SK Hynix for $9 billion.
Intel exiting the flash memory and storage business
The deal will see Intel part with the NAND SSD unit, the NAND component, and the wafer business. The company will also sell its Dalian NAND factory in china as it exits the flash memory and storage business. The deal will see Intel receive the payments in two batches, with the deal’s conclusion expected to be in March 2025.
Intel will retain the Optane SSDs technology that they are jointly developing with Micron. Micron is manufacturing the exotic 3D Xpoint technology (Optane). Interestingly Intel purchases most of the Optane memory from Micron because it doesn’t manufacture them in high volumes.
Bob Swan, the Intel CEO, said that the transaction will help the company prioritize investment in differentiated tech. Swan sees this to be an area where Intel can have a huge impact on customers’ success and generate attractive returns for its shareholders.
Intel to receive the $9 billion in two payment forms
This deal is subject to government approval, and it will take time with the finalization of details expected by late next year. SK Hynix is expected to pay an initial payment of $7 million to get NAND-SSD-related IP, Dalian facility, SSD business, and employees. The other $2 billion will be paid in 2025 and will grant the remaining assets of SK Hynix, which include R&D employees, NAND manufacturing IP, and the rest of the Dalian employees. Before completing the transaction, Intel will continue manufacturing NAND products at its Dalian facility in China and will keep all IP rights.
This is the latest consolidation from the company, which has focused more on core chipmaking and data center operations in recent months. Last year, Intel also sold its 5G smartphone modem operations to Apple Inc. (NASDAQ:AAPL) for $1 billion.