The European Commission has approved SK Hynix’s acquisition of Intel’s NAND flash and solid-state drive businesses, bringing the Korean semiconductor biz one step closer to officially closing the $9bn takeover.
The deadline for the European regulators to decide on the merger passed this week with no issues, and SK Hynix also confirmed the approval in a statement on Friday.
“SK Hynix has received unconditional clearance from the European Commission for its proposed acquisition of Intel’s NAND and SSD business,” it said. “The proposed acquisition will help SK Hynix expand its global footprint, adding complementary memory technology. SK Hynix expects to enhance its expertise through the acquisition, to deliver more breakthroughs and higher value products for customers.”
Market watchdogs in the US, including the Federal Trade Commission and the Committee on Foreign Investment in the United States, have also given SK Hynix the green light to swallow up part of Chipzilla.
Under the deal, the Korean chipmaker will get its hands on Intel’s NAND flash as well as its memory and storage wafer fabrication plant in Dalian, China. Optane will remain Intel property.
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The deal hasn’t completely closed, however, and SK Hynix still needs approval from other governments. The company hopes to finish the process this year. “SK Hynix and Intel will do [their] best efforts for the remaining approvals to be obtained during 2021,” it said.
It’s a good deal for both SK Hynix and Intel. If the merger officially passes, SK Hynix will become the world’s second largest semiconductor company providing memory and storage products, giving it more resources to take on its biggest competitor in its home country, Samsung. Meanwhile, Intel will get to pocket $9bn it can spend to ramp up and improve the production of its lucrative processor business.
Intel will have its work cut out, however. The semiconductor industry is rough right now due to the ongoing effects of the COVID-19 pandemic and supply issues. Fabrication plants can’t churn out chips fast enough to keep up with demand. Everyone from automotive manufacturers to computer game console makers are feeling the effects.
The crisis prompted the Biden administration to sign an executive order, promising to identify and resolve weaknesses in America's chip supply chains. The President also proposed a $50bn plan to bolster R&D and manufacturing. More semiconductor fabrication plants are being built on US soil; Intel announced it was splashing $3.5bn to build a 3D packaging chip lab in New Mexico and TSMC has plans to build a total of six fabs in Arizona. ®