Intel announced that it has closed the first phase of selling its SSD and NAND business to SK hynix. The latter also announced the creation of a new subsidiary, Solidigm, to manage the production of solid state drives.
The amount of the first tranche was $ 7 billion. The total deal was estimated at $ 9 billion.
Intel veteran Rob Crook, formerly senior vice president and general manager of Intel's Non-Volatile Memory Solutions Group, will become head of Solidigm.
The first phase of the sale includes the transfer to SK hynix of the Intel factory in Dalian, China, the transfer of some employees, and the transfer of intellectual property related to NAND SSDs.
The final stage of the transaction will take place in March 2025. Until then, Intel will continue to manufacture NAND wafers at its Dalian plant. However, after the completion of the last phase, the company will transfer the remaining staff from the R&D department, as well as the last staff involved in NAND development and intellectual property production, to SK hynix. At this stage, Intel will also stop producing NAND in the Chinese factory.
Solidigm will be headquartered in San Jose, California. Lee Seok Hee, President and Co-CEO of SK hynix, will become the company's executive chairman.
Solidigm will be subject to several restrictions from Chinese regulators, including price caps on finished products and components, and five-year supply guarantees for enterprise-grade PCIe and SATA components. All existing Intel SSDs will now be manufactured and marketed under the Solidigm brand.
“Solidigm is poised to be the next major semiconductor company in the world, presenting an unprecedented opportunity to reinvent the memory and storage industry,” Crook said.
The deal will allow Intel to focus more on its other lines of business as it moves out of the low-margin and capital-intensive flash memory space, which is prone to high price volatility. The company will retain the 3D XPoint technology used in its Optane products. However, the future of this technology is unclear after its manufacturing partner Micron recently sold its factory and stopped production of the 3D XPoint. Intel also plans to bring Mobileye, its self-driving car technology company, to an IPO next year. However, she will be the majority owner of the public company.
It was reported in the summer that Intel is going to buy a semiconductor startup SiFive for $ 2 billion. The company develops microcircuits based on the RISC-V architecture. Its investors include SK Hynix Inc., Spark Capital and Prosperity7 Ventures, the venture capital arm of the state-owned energy company Aramco in Saudi Arabia.
However, in the fall it became known that the negotiations between Intel and SiFive ended without a deal. Instead, the startup will seek third-party investments, according to those in the know. Intel now has new deals to close the chip design gap with NVIDIA and AMD in HPC, GPUs and deep learning, according to media reports.
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