Intel is trading its SSD business to SK Hynix in a deal worth $9 billion, which will see the chipmaker about simply exit the flash memory and storage business except for Intel’s high-end Optane memory technology, which it’ll, however, be hanging onto.
The deal involves Intel’s former NAND SSD, component, and wafer businesses, along with the company’s NAND factory in Dalian, China.
“For Intel, this transaction will enable us to be additional prioritize our investments in differentiated technology where we can play a more important role in the success of our customers and deliver attractive returns to our stockholders,” stated Intel CEO Bob Swan.
It’ll be any time until the deal takes place: the two companies are beginning to get governmental permission for the purchase, which they don’t demand to get until “late 2021.” Until that happens, Intel will remain to make NAND products at the Dalian factory and retain all its IP rights.
The transit marks the latest consolidation for Intel, which has extended to focus further on its core chipmaking and data centre businesses in new months.
Intel also newly sold its 5G modem business to Apple last year in a settlement worth $1 billion.
With no possibilities for large profits on the horizon, Intel is smart to give up on memory. Head, the move can improve the company’s bottom line.
Earlier this month, Raymond James thought Intel could increase its annual free cash flow by $2 billion if it left the memory business.
Second, the views of this part of the chip industry aren’t very likely. This, analysts state, is because market leader Samsung is prepared to flood the market if needed to defend its leading position, without regard to keeping its prices.
Intel requires to concentrate on its principal business: central-processing unit (CPU) chips. Honestly, the company has grown distracted with some needless acquisitions and forays into different markets such as security software, smartphone wireless chips, and programmable FPGA chips.