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SK hynix wins approval from China for $9 billion business deal with Intel

By Park Eel-kyung & Kim Tae-gyu, UPI News Korea
Exterior view of the SK hynix Inc. headquarters, South Korea's No. 2 chipmaker, in Icheon, south of Seoul, South Korea. China’s antitrust agency has approved a semiconductor deal between SK hynix and Intel, allowing the $9 billion contract to go through. Photo by Yonhop/EPA-EFE
Exterior view of the SK hynix Inc. headquarters, South Korea's No. 2 chipmaker, in Icheon, south of Seoul, South Korea. China’s antitrust agency has approved a semiconductor deal between SK hynix and Intel, allowing the $9 billion contract to go through. Photo by Yonhop/EPA-EFE

SEOUL, Dec. 23 (UPI) -- South Korean semiconductor manufacturer SK hynix has received China's approval to finalize its deal to buy Intel's NAND flash business.

The State Administration of Market Regulation announced Wednesday on its website that the Chinese antitrust agency had granted approval for the $9 billion contract between SK hynix and Intel.

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The measure did away with concerns that the Chinese government may become a stumbling block for SK hynix's largest-ever acquisition.

In October 2020, the world's second-largest memory chipmaker agreed to buy Intel's non-volatile business for $9 billion, a contract which was subject to the approval of eight countries.

SK hynix gained approval from seven countries, including the United States and South Korea. The firm requested a final approval from China in December 2020, but struggled to receive it before this December, the deadline.

SK hynix is scheduled to pay $7 billion in the contract's first phase to take over Intel's facility in China, and the remaining $2 billion by March 2025, when the deal is set to be completed.

"We welcome the decision of the Chinese government. We will continue the remaining post-merger integration process to enhance our competitiveness in the NAND flash and SSD businesses," SK hynix said in a statement.

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Short for "solid-state drive," an SSD uses integrated circuit assemblies to store data, typically using flash memory.

According to Taiwanese market tracker Trendforce, SK hynix accounted for 13.5% of the NAND flash market as of the end of the third quarter of this year.

By acquiring Intel's NAND storage unit, which occupies 5.9% of the market, the overall market share for SK hynix is expected to approach 20%.

"By achieving a market share of around 20%, SK hynix will be able to achieve the economy of scale," Meritz Securities analyst Kim Sun-woo told UPI News Korea.

"In addition, Intel's advanced controller technology and customer base for servers will become significant assets of SK hynix," Kim said.

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