Semiconductor giant Intel (NASDAQ:INTC) is selling its NAND memory operations to South Korean memory expert SK Hynix. First reported by The Wall Street Journal, the deal was confirmed today by a press release from SK Hynix.

A handshake where one hand is green and covered in circuit board traces.

Image source: Getty Images.

The $9 billion takeover will include Intel's NAND memory chip designs, including a factory in China and the accompanying solid-state drive (SSD) storage business. Intel will hang on to its high-speed Optane memory chip operations. The companies hope to have all the required governmental and regulatory approvals in hand by the end of 2021.

The deal is structured as two separate transactions. A $7 billion payment will move Intel's SSD operations and the memory-chip manufacturing line to SK Hynix as soon as the sale is approved. The remaining assets will follow in March 2025, along with a final payment of $2 billion. Intel will continue to run the chipmaking factory in Dalian, China, and retain the intellectual property rights to the design and manufacturing of NAND memory wafers until the final transaction is completed.

Intel and SK Hynix have been running a close race for fifth place in the global NAND market, according to industry watcher DRAMeXchange. The deal should move SK Hynix into second place behind market leader Samsung (OTC: SSNLF) and ahead of American peer Micron Technology (NASDAQ:MU).

The two companies also manage complementary portfolios of unique NAND technologies such as SK Hynix's 128-layer 4D NAND chips and Intel's floating gate memory cells. Combining the specific strengths of two separate technology collections should unlock additional value in the long run.

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