Intel said it will use the proceeds of the deal to focus on artificial intelligence, 5G and advanced computing.
“This transaction allows us to further prioritize our premium technology investments as we can play a greater role in the success of our customers and provide attractive returns to our shareholders,” said Bob Swan, CEO of Intel.
Reported newspaper The Wall Street Journal debuted earlier this week that the two companies were close to reaching an agreement to transform SK Hynix into one of the world’s largest (NAND) memory manufacturers, second only to Samsung.
The deal with SK Hynix is Intel’s latest deal to double the technology development of its 5G infrastructure.
Last year, Intel sold the majority of its modem business to Apple for about $ 1 billion. “The deal allows Intel to do its best in 5G as it closely aligns with the needs of its global customer base,” Swan said.
Once the deal is approved and closed, SK Hynix, headquartered in Seoul, will manage the business of NAND SSD and NAND memory cards and chip components from Intel and the NAND factory in Dalian, China.
Intel maintains its Optane business, which makes SSDs, and the two companies said: Regulatory approval is expected by late 2021, and all assets will be finally closed in March 2025.
Until final closure, Intel will continue to manufacture NAND chips at the Dalian plant and will retain all intellectual property rights relating to the manufacture and design of NAND chips.
During the six-month period ending June 27, 2020, NAND’s business represented approximately $ 2.8 billion in revenue for the memory solutions group, and contributed nearly $ 600 million to the division’s operating income.
And according to the Wall Street Journal, this represented the majority of Intel’s total memory sales – nearly $ 3 billion – during that period.
CEO of SK Hynix said: The deal allows the South Korean company to improve its business structure and expand its innovative portfolio in the (NAND) sector.