Billion deal: Intel sells flash memory business to South Korean chip company

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Logo of the South Korean chip company SK Hynix Inc .: After the Intel deal, the company can further expand its flash memory business

Photo: Ahn Young-Joon / dpa

The market for memory chips is characterized by a sharp price war.

At the same time, the tech companies have to invest a lot here in order to survive the competition.

Intel is now saying goodbye to this market - at least in part.

The chip giant Intel is separating from a flash memory subsidiary and is now concentrating more on its core business.

The South Korean chip company SK Hynix pays a total of nine billion dollars for the Nand memory division, as both companies announced.

The transfer of business and payments will therefore take place over several years until 2025.

Intel is saying goodbye to a segment that is considered difficult because of the constantly falling prices for flash memory.

These chips are mainly used in mass storage devices such as USB sticks and camera memory cards.

The US chipmaker had been considering leaving the business for some time because the desired profits could not be generated.

An oversupply of memory chips caused prices to collapse two years ago.

However, high demand then ensured that prices rose again.

Flash memory business is booming due to Corona

Experts now see SK Hynix in a position to further expand its market position in the flash memory business that is booming as a result of the corona crisis.

Memory chips such as those produced by SK Hynix are also used in

• Smartphones,

• Tablet computers

• and PCs used.

With the takeover of the memory business from Intel, the South Koreans will also buy the associated production facilities in the Chinese metropolis of Dalian, the company said.

However, Intel will keep its Optane line of memory products.

Optane memory chips are more complex than Nand memories and are used extensively, especially in data centers.

Intel said it will invest the proceeds from the sale primarily in fast-growing segments such as artificial intelligence and the fifth generation of cellular communications (5G).

"This transaction will allow us to continue our investments in differentiated technology, where we can play a greater role in the success of our customers and generate attractive returns for our shareholders," said Intel CEO Bob Swan.

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kim / dpa