SK Hynix, new details on the future of Intel's NAND division
SK Hynix
An Intel executive announced that SK Hynix will not only absorb the company's 3D NAND and SSD department, having acquired all of its assets for nine billion dollars over the next few years, but will effectively run it as a standalone state-based company. United. The move could help the unit retain its existing US corporate and government customers after the handover.Credit: SK Hynix The same person said on LinkedIn (as reported by CRN), that " the company will have a new name, headquartered in the US and will be led by Robert Crooke, who is currently the general manager of Intel's NAND products. The business entity will initially be owned by Intel and SK Hynix and will become a wholly owned subsidiary of the latter in 2025. Although it will be part of SK Hynix, it will retain some degree of independence.
The 3D business Intel's NAND and Storage has always focused primarily on enterprise servers and storage systems (which is one of the reasons the Intel-Micron joint venture has gone bankrupt). In contrast, SK Hynix builds 3D NAND and storage solutions for virtually all types of devices that require non-volatile storage devices. To this end, instead of integrating Intel's unit into SK Hynix and inevitably losing customers (especially government customers) and market share, the South Korean giant will keep Intel's former business as a separate entity. Of course, it remains to be seen whether the new company will continue to develop its 3D NAND memory and use SK Hynix-designed SSD controllers. However, at least formally, it will be a separate unit from the parent company.
In fact, the terms of the nine billion dollar transaction between Intel and SK Hynix are quite complex, so integrating Intel's resources into the South Korean company would probably be too complicated. After the companies gain approval from various regulatory bodies around the world, SK Hynix will pay Intel seven billion dollars for Intel's NAND and SSD business, which includes the factory in Dalian, China, IP and employees. However, Intel will not have the remaining 2 billion before the deal is finally concluded in March 2025, when SK Hynix will obtain the remaining assets, including the intellectual property related to the manufacturing and design of NAND flash wafers, the employees of the sector "research and development ”and the Dalian workforce. Meanwhile, Intel will continue to produce NAND flash at the factory until the contract is closed.
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SK Hynix To Turn Intel NAND Business Into Stand-Alone US Company
SK Hynix plans to turn Intel’s NAND memory and storage business into a stand-alone U.S. company that will be owned by the South Korean chipmaker.
That’s according to Robert Crooke, senior vice president and general manager of Intel’s NAND Products and Solutions Group, who wrote in a LinkedIn post Tuesday that he will become CEO of the U.S.-based company once SK Hynix’s $9 billion acquisition of Intel’s NAND business closes.
[Related: Intel Makes Case For Optane’s Future As NAND Biz Splits Off]
Crooke said the company will have a new name, which will be announced later. He added that the company has more than 150 positions open and linked to a hiring site with roles across China, Taiwan, Poland, the U.K. and California.
“There are tremendous career opportunities as we build a new multibillion-dollar global company that brings together amazing technology, people and operational scale to become a powerhouse in the NAND storage and memory industry,” Crooke wrote.
Alexey Stolyar, CTO of International Computer Concepts, a Northbrook, Ill.-based systems integrator, told CRN that Intel’s NAND business will help SK Hynix build out its American presence and expand its sales reach, which has been more focused on the OEM side in recent years.
Stolyar added that Intel’s NAND SSD products have sold well at his company, and they’re well supported by a sales and marketing team that he expects will largely stay the same under SK Hynix. One of the biggest questions he has for the business, whether it’s part of Intel or SK Hynix, is availability, which has been a challenge for products across multiple vendors as part of the global chip shortage.
“The transition is going to be pretty simple,” he said. “One day it’s going to be a different brand, and I think their biggest thing is how do they keep up with the road map and availability of products.”
Intel and SK Hynix announced last October that Intel would sell its NAND memory and storage business to SK Hynix for $9 billion. This means that Intel will part ways with its NAND SSD product line while it holds on to its Optane memory and storage business that now sits within the newly formed Datacenter and AI Group, a division Intel created recently as part of a restructuring of its Data Platform Group.
The deal is expected to close in two parts. The companies have previously said that SK Hynix will acquire Intel’s NAND SSD business, along with associated technology IP and employees in addition to a plant in Dalian, China, for $7 billion once that part of the deal is approved by regulators, which they expected to happen in late 2021. The second part is expected to close in March 2025 and will include technology IP related to the manufacture and design of NAND flash wafers as well research and development employees and the Dalian factory workforce.
The SK Hynix-Intel NAND deal has already received approval from the U.K., U.S. and European Union, and SK Hynix said last week it expects to get approval from China later this year.
SK Hynix has previously said that the acquisition of Intel’s NAND business will make it more competitive in the storage market, particularly in the realm of enterprise SSDs.
In October, the company highlighted Intel’s “industry-leading” NAND SSD technology and quadruple level cell NAND flash products and how Intel’s NAND businesses generated $2.8 billion in revenue and contributed roughly $600 million in operating income for the first six months of 2020.
“By taking each other’s strengths and technologies, SK Hynix will proactively respond to various needs from customers and optimize our business structure, expanding our innovative portfolio in the NAND flash market segment, which will be comparable with what we achieved in DRAM,” said Seok-Hee Lee, CEO of SK Hynix, in a statement at the time.
