SK Hynix. Photo: CFP

SK Hynix, a South Korean semiconductor supplier, has completed the first phase of purchasing Intel's NAND solid-state drive (SSD) memory chip business and its assets in Dalian, Northeast China's Liaoning Province, with the allocation of $7 billion, the company told the Global Times on Thursday, following the approval of China's top market regulator on December 22.

According to an announcement the company sent to the Global Times, SK Hynix is expected to pay $2 billion during the second phase in March 2025 to acquire the remaining tangible and intangible assets from Intel, including NAND flash wafer manufacturing and design-related intellectual property, R&D personnel, and employees at the Dalian plant. Only then will the acquisition be finalized.

The company said that the newly established US subsidiary will be responsible for product development, manufacturing and sales of the acquired Intel SSD business. The name of the new company is "Solidigm," a portmanteau of solid-state and paradigm, which implies the firm is committed to revolutionizing the storage industry by creating a new solid state paradigm that provides new services for customers.

The Chinese antitrust bureau said that the purchase will integrate the patents and unique know-how of both parties, eliminate SK Hynix's close competitors in the global and Chinese market, reduce competition constraints faced by SK Hynix and further improve its market control.

"The successful purchase is an important step for the company to establish a near-monopoly in the storage market," Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times on Thursday.

After the completion of the deal, the main competitors in the enterprise-class SATA SSD market will decrease from four to three in the world with their global market share exceeding 90 percent, and major competitors in the enterprise-level PCIe SSD market will decrease from three to two, with a combined global market share of more than 80 percent, said SAMR.

Xiang noted that the Chinese government should prevent the company from manipulating the domestic market and setting arbitrary prices, as the company further increases its market control.

On December 22, the State Administration for Market Regulation (SAMR) conditionally approved SK Hynix's planned purchase of Intel's NAND memory chip business, and the restrictive conditions will be effective for 5 years, after which the antitrust bureau will decide whether to remove the conditions in line with SK Hynix's application and competition in the market.

One of the conditions is that the prices of the SK Hynix products sold in the Chinese market shall not be higher than their average prices in the 24 months prior to the merger, provided that the transaction terms are comparable.

Global Times