back to article Intel offloads NAND business to South Korea's SK Hynix for a cool $9bn

Intel has agreed to sell its NAND and SSD businesses to South Korean chipmaker SK Hynix for $9bn. The deal will see SK Hynix become the world's second largest provider of flash memory, overtaking Japanese rival Kioxia (formerly Toshiba's memory biz) and closing in on Samsung's memory business. Samsung accounted for over a …

  1. Elledan

    Future of Optane?

    Notable is that Intel is still keeping their 3D XPoint technology and assets. Supposedly Intel is close to releasing a new generation of Optane drives and (presumably) caching tech. Maybe they're banking on the proceeds from that, along with the sale of their NAND division, to keep their flagging CPU side going until they can fix the issues at the Intel semiconductor fabs.

    That said, this feels somewhat like Samsung selling their LCD factories and refocusing on QLED. While there was a lot of shock and fuss about that, the truth of the matter is that regular LCD tech is highly competitive and on its way out (cue OLED, QLED & MicroLED), making for razor-thin profit margins. With how competitive the NAND Flash market is, and how it's painting itself into a corner by having each generation (SLC, MLC, TLC, QLC, etc.) significantly reduce durability, speed and so on, I can imagine that shedding this division makes a lot of sense for Intel.

    1. oiseau Silver badge

      Re: Future of Optane?

      ... imagine that shedding this division makes a lot of sense for Intel.

      This deal probablty makes sense for both parts involved, probably more to SK Hynix.

      Unless the beancounters/auditors got it wrong and the Koreans end up going after Davis, Swan or some other executive involved.

      But not before crying bloody murder! and producing an absurd 80% write-off.

      À la HPE ... 8^D !!!

      O.

  2. David Austin

    Seems short-sighted

    NAND isn't going anywhere soon with the storage speed and size requirements of the world growing all the time; This screams short term cash over losing long term income.

    The only other way to read it is Intel has bet the family silver on Optrane taking over both memory and Storage as a mega growth area but.. well, as Itanium is the last time Intel bet big on a technology steamrollering the competition....

  3. J27

    It's stupid for Intel to sell a profitable business to look less incompetent short-term. This is the sort of short-term thinking that's endemic in the type of establishment executives that are currently running Intel. These stuffed shirts are the main problem with Intel's current direction, semiconductor manufacturing requires long-term thinking.

    1. Sandtitz Silver badge

      "It's stupid for Intel to sell a profitable business to look less incompetent short-term."

      Profitable? Anandtech article about this deal states the probable reason:

      "While Intel’s Non-Volatile Memory Solutions Group (NSG) as a whole brought in $4.4B in revenue for 2019, the group has lost money for 4 of the last 5 years, recording flat or negative operating incomes. Only in the last six months has Intel made any real money off of NAND, reporting $600M in operating income for the first half of 2020. So although NSG – and by large part, Intel’s NAND business – have played a big part in Intel’s record revenues, they haven’t turned a significant profit for a company that’s renowned for their 60% gross margins."

      SSD's are already a commodity and Intel has a long history in well performing SSD's. But now even the cheapest Chinese drives are reasonably competitive with the big boys' offerings and offer good enough performance that most people won't perceive the difference in regular use.

      This deal doesn't cover Optane which is top end high-price enterprise stuff. Which means higher margins and assiaciates Intel as high-end (in some minds at least).

      1. Roland6 Silver badge

        Re: Profitable?

        Well compared to where it seems Intel are currently going with processor technology...

        Intel are definitely betting the house on quickly catching-up and overtaking AMD...

  4. luis river

    crazy business

    I believe Hynix is out of wave, 9000 M $ by one Nand Tech under next serious menace of other memory Tech´s, it is not one bargain. !!!

    1. nautica Bronze badge
      Meh

      Re: crazy business

      I'd really like to know what's being said here, but no "translate" program works.

      1. Anonymous Coward
        Anonymous Coward

        Re: crazy business

        @nautica

        Upvoted. I thought it was just me being totally clueless.

        Cheers… Ishy

  5. devTrail

    The usual question

    Is there a competition watchdog with some teeth out there?

  6. EnviableOne Silver badge

    All about IP

    from SKH its all about getting hold of Intel's NAND IP, and the fab is useful too.

    for Intel its about decreasing exposure to china and making some cash to sort out the 10nm and 7nm process nodes.

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