Intel Corp has agreed to sell its NAND memory chip business to SK Hynix for $9 billion in cash, Reuters reported. This will propel the Korean chipmaker to climb another story in the global rankings.

The deal will reportedly allow SK Hynix to overtake Japan's Kioxia in the NAND memory market and close the gap with industry leader Samsung Electronics.

With the recent popularity of working from home, the demand for tablets and server chips is generally increasing.

It is said that Intel Corp will sell all his NAND business for 9 billion US dollars and will give up his love for the Dalian factory.

According to reports, SK Hynix said in a statement on Tuesday that it would pay 10.3 trillion won for the Intel Corp business.

Hynix said Intel Corp would sell all its NAND businesses, including solid-state drives and NAND flash memory products, including a factory in Dalian, China. Intel Corp will retain its advanced Optane memory business and related XPoint technology.

Intel Corp Dalian Factory is the main production base of Intel Corp 3D NAND SSD, and it is also one of the wafer factories that Intel Corp attaches great importance to. Its production speed is in the leading level in the world.

Compared with the original NAND, the technological improvement of 3D NAND flash memory chip can be understood as building the original flat memory cell into three-dimensional, so that there will be more cell stored on one chip.

Intel Corp Dalian factory is Intel Corp's first newly built fab since establishing F10 fab in Ireland in 1992, and it is also Intel Corp's first wafer fabrication plant in China and even Asia (except for the United States, Intel Corp has wafer factories only in Ireland and Israel).

The Dalian factory started production in 2010 and was mainly engaged in the production of 65nm products before 2015. By 2015, it began to transform into 3D NAND storage products, and achieved mass production a year later, which shocked the industry.

Over the past five years, the Dalian plant has gathered the main production capacity of NAND chips and will also be responsible for the production of 3D Xpoint (the medium used by Intel Corp Aoteng) non-volatile memory chips.

It is hard to imagine that such a Dalian factory would really be sold.

The sale to SK Hynix would mark a serious decline in the company's business in China.

A person familiar with the matter told Reuters that the deal would allow Intel Corp to focus on the rest of his Aoteng memory business.

Intel Corp didn't respond to a request for comment.

Analysts said the sale was a win-win for the company. "toothpaste factories have their eye on profitable sectors, and SK focuses on absorbing NAND capacity and increasing market share." "

In fact, it was reported as early as last July that Hynix and Intel were in negotiations, when Hynix was under pressure from Japan to cut off supply, when Japan announced that it would restrict the export of key semiconductor materials to South Korea. Intel Dalian plant can help Hynix ensure production capacity, on the other hand, it can also ease the pressure of supply outages.

CPU started his storage business and broke up peacefully with Meguiar.

Intel Corp has been considering quitting the business for some time due to the falling price of flash memory, according to the Wall Street Journal's Chinese website.

In fact, judging from all the signs, the deal, if true, also has its strategic considerations.

People are familiar with Intel Corp because of his reputation as a CPU giant, but in fact Intel Corp has a deep foundation in the memory business. In the 1960s, Intel Corp started out as a storage business. In the 1980s, Japan boomed its electronics industry and gradually changed direction after fierce competition.

At present, memory and storage are still one of Intel Corp's six pillars (process and packaging, architecture, memory and storage, interconnection, security, software), but it seems that there are other arrangements from a strategic point of view.

Compared with Samsung, Kioxia Holdings Corp and the trading party SK Hynix, Intel Corp has a very small share in the global NAND chip market.

In addition, it is worth mentioning the previous "peaceful breakup" between Intel Corp and Meiguang.

Intel Corp and Meguiar launched 3D XPoint in August 2015, creating the first new type of memory technology in 25 years. In January 2018, the two companies, which have worked together for many years, announced that they would officially go their separate ways after completing the development of the third-generation 3D NAND.

Both Intel Corp and Meiguang emphasize that after independence, both sides can devote enough energy and time to optimize their products and better serve customers. The reason for the breakup mainly lies in different attitudes towards the future development of NAND technology.

In March, Intel Corp CFO George Davis said that although there is still room for growth in the flash market, including data centers, the company "has not yet been able to get the kind of return it hopes to see".

Other lines of business obviously require more attention than memory and storage.

In July this year, Intel Corp announced that his 7nm chip technology would be further delayed due to technological problems. 7nm chip technology is the foundation of future generations of CPU.

Some analysts say that withdrawing from non-core business can make Intel Corp more focused on the chip.

Intel Corp's share price has fallen about 9% so far this year, and divesting the NAND flash business may be expected to solve Intel Corp's current chip technology dilemma.

The oligarch in the storage market is dominant, eating 90% of the global share.

The NAND business sold by Intel Corp is a kind of memory chip. Memory chips are widely used in daily life, such as mobile phones, tablets, PC, servers and other products without memory chips.

At present, there are mainly two kinds of memory chips on the market, one is NAND flash memory, the other is DRAM memory, which is much higher than the former chip technology threshold.

On the whole, the global memory chip market presents four dominant situations. Samsung, Micron Technology Inc, Kioxia and SK Hynix almost monopolize more than 90% of the global market share.

This is also intuitively illustrated by the statistics released this year by Strategy Analytics, a market analysis company, and another market institution on the global market share of DRAM and NAND chips.

In terms of NAND flash chips, Samsung accounted for 43% of the global smartphone NAND flash chip market in the first half of 2020, and SK Hynix accounted for 22% and 17%, respectively, according to a report by Strategy Analytics.

In terms of the DRAM market, according to data from market institutions, in the first quarter of 2020, the top three global DRAM markets were Samsung, Hynix and Micron, respectively, accounting for 44.1%, 29.3% and 20.1% of the market share, totaling nearly 95%.

In fact, although more and more smart electronic products increase the demand for memory chips, the global memory chip market has not performed well since 2019.

According to the revenue of the world's top 10 semiconductor companies released by market research agency Gartner in 2019, memory chip companies Samsung, SK Hynix, Micron and others have all seen a sharp decline in performance. Samsung's revenue fell 29.1% year-on-year, SK Hynix and Magnesia fell 38.0% and 32.6% respectively.

In 2020, the demand for electronic equipment brought about by the epidemic led to a general rise in the semiconductor industry, but the storage chip market did not usher in the expected rebound. In this case, Intel Corp chose to sell the NAND business and focus on more advanced chip technology, which is also a wise choice.