Intel sells faltering SSD business to SK Hynix

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Image: IDGNS

Chip maker plans to reinvest the cash elsewhere but holds on to Optane

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21 October 2020 | 0

Intel, one of the biggest names in the Flash storage and SSD business, has sold all of its SSD operations to SK Hynix for $9 billion.

The sale is interesting because of the quality of what Intel is selling – and the length of time SK Hynix is waiting to get its hands on it. Intel makes some of the most expensive SSDs on the market, like the Optane SSD 905P that’s over two years old and still sells for over more than €1,000. Meanwhile, South Korea-based SK Hynix is making a splash with SSDs that are fast and very low-priced.

Intel will provide SK Hynix its SSD facility and China fab after government approvals are expected in late 2021. But SK Hynix will not acquire the remainder of Intel’s NAND technology, including its intellectual property and research and development employees, until the deal closes in 2025. Until then, Intel will continue to manufacture NAND chips at the Dalian, China memory facility and hold onto all of its technology.

 

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SK Hynix representatives didn’t comment on the reason for the delay. SK Hynix says it plans to expand its operations through the sale, while Intel, interestingly, said that it plans simply to take the cash and reinvest it.

Eventually, SK Hynix will be able to add Intel’s NAND SSD business and quad-level-cell (QLC) Flash memory technology to its war chest. SK Hynix has been going in a slightly different direction, developing what it calls Charge Trap Flash (CTF)-based, 96-layer 4D NAND Flash in 2018 and 128-layer 4D NAND Flash in 2019.

Intel chief financial officer George Davis may have signalled Intel’s exit in a March, 2020 interview at the Morgan Stanley Conference, as transcribed by Anandtech. Davis said then that the company hadn’t been able “to generate the profits out of [NAND Flash] to get the kind of returns that we would like to see.”

“But we’ve said we’re going to look at ways of improving profitability,” David added, “not only in terms of how we manage the business every day, but also in looking at partnerships and other things where we can perhaps improve the overall economics of the investment.

“We’re in the middle of that process, and we’ll keep people up to date as we make progress.”

One thing notably not included in the sale is Intel’s Optane technology, which Intel co-developed with Micron and then adopted entirely after severing the joint relationship in 2018.

IDG News Service

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