Sk Hynix access Intel flash memory Korean manufacturers account for half of the storage chips

 Sk Hynix access Intel flash memory Korean manufacturers account for half of the storage chips

Since 2020, semiconductor has been purchasing heavily. On October 20, SK Hynix and Intel announced that SK Hynix will purchase Intel NAND flash memory business for $9 billion. The acquisition includes Intel nandssd business, NAND parts and wafer business, as well as its NAND flash memory manufacturing plant in Dalian, China. However, Intel will retain the storage business of optane.

NAND flash memory and DRAM, as important memory chips, are widely used in mobile phones, computers and other terminal equipment, and are indispensable high-cost core devices. In this field, Samsung ranks first, followed by SK Hynix. After the acquisition, SK Hynix can be said to be more powerful, and the pattern of NAND flash memory market will also be changed.

In fact, Intel first became famous in memory. Since then, in the process of the rise of Japanese and Korean enterprises, Intel decisively changed its main business to CPU, specializing in processors. Although the revenue brought by NAND has increased in recent years, it has suffered a long loss. It was gradually profitable only last year. In addition, the storage market is in turmoil. The news that Intel plans to sell NAND business has been circulating in the industry for a long time, and now it has finally landed.

Sk Hynix expands Intel slimming

A number of insiders told the 21st century economic reporter that the two protagonists in the acquisition case took what they needed. SK Hynix expanded its market share and lost one competitor, while Intel gained considerable financial benefits.

First of all, from Intels point of view, in the external statement, CEO of Intel, Mr. Ruibo, stressed that for Intel, this transaction can enable Intel to focus more on investment in differentiated technologies and generate considerable returns for investors. Intel plans to use the funds from the deal to strengthen its business priorities with long-term growth potential, including artificial intelligence (AI), 5g network and intelligent, and edge devices related to autonomous driving.

In recent years, at the helm of its latest CEO, Intel has been changing. On the one hand, it reduced the financial burden by downsizing its business. Last year, Intel sold its mobile phone baseband business to apple, and now it sells its flash memory business to sk Hynix. On the other hand, Intel accelerates the transformation of cloud business and strengthens data related business groups. At present, the revenue related to data has been higher than that from PC business, and the bottom layer is still the main channel focusing on CPU.

For Intel, the non core business of flash business contribution is not high. Although it includes flash memory business, NSG (non-volatile memory solutions group) had revenue of $1.7 billion in the second quarter, up 76% year-on-year. As of June 27, 2020, Intels NAND business has generated about US $2.8 billion in revenue and about US $600 million in operating profit in NSG. However, in previous years, NAND business suffered losses for several years, and only improved in 2019. In addition to the cyclical fluctuations in the storage industry, the non core NAND business is regarded as a burden of Intel, and the sale is also in line with the current business strategy.

Sk Hynix has been actively expanding its territory in recent years. Both NAND flash memory and DRAM continue to invest in new factories, including the new factory in Lichuan, South Korea, and the expansion of Wuxi factory in China. In the highly competitive semiconductor market, SK Hynix also wants to further improve its profitability. Next, Intels Dalian factory will supplement SK Hynixs NAND flash memory capacity.

Sk Hynix said that it will combine Intels storage solution related technology and production capacity to create a series of 3dnand solutions with high added value, including enterprise SSD.

Memory chip pattern or change

This acquisition will undoubtedly change the pattern of flash market. The semiconductor research office of trendforce Group Consulting pointed out to the reporter of 21st century economic report that the merger is expected to give the two companies a comprehensive effect in the field of enterprise SSD and start the integration of nandflash industry.

Furthermore, Samsung and SK Hynix continue to dominate in the overall memory market. In terms of DRAM market share, the top two brands of DRAM in the second quarter were Samsung (44.1%) and SK Hynix (29.3%), which accounted for more than 70% of the market. As a result, SK Hynix ranks second in the world in terms of NAND flash memory and DRAM.

According to Jibang consulting, if the product competitiveness is further differentiated, SK Hynixs strengths in nandflash are mobile phone field, including EMCP and EMMC products, accounting for more than 60% of SK Hynixs total nandflash revenue. Intel has been doing well in the field of enterprise SSD for a long time. It not only keeps pace with Samsung, but also accounts for more than 50% of the market in China. In terms of all terminal applications of nandflash, enterprise SSD is the most profitable product.

In terms of production capacity, SK Hynixs current nandflash production capacity is all located in South Korea; Intels nandflash production capacity is all located in Dalian, China. Intel is the company that promotes QLC architecture most among all nandflash manufacturers, and is expected to account for more than 30% of its output by the end of this year. After SK Hynix has obtained Intels 3dnandflash capacity, its competitiveness in the field of enterprise SSD will greatly increase. What needs to be focused on is how to balance the different product architectures of Intel and SK Hynix to achieve the maximum comprehensive effect. It should be noted that the acquisition is limited to 3dnandflash related technologies and capacity, excluding the emerging memory technology 3D xpoint.

(author: Ni Yuqing, editor: Xu Xu)

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