SK Hynix, a leading global semiconductor manufacturer, revealed today its agreement to acquire Intel’s flash memory operations for a sum of $9 billion. Intel stated that the funds generated from this transaction will be allocated towards strengthening its focus on artificial intelligence, 5G technology, and edge computing solutions.

According to Intel’s chief executive officer, Bob Swan, “This transaction enables Intel to concentrate further on investments in unique technologies where we can significantly contribute to our customers’ achievements and provide compelling value to our shareholders.”

The Wall Street Journal initially reported earlier this week that the two corporations were close to finalizing an agreement. This acquisition will position SK Hynix as a major player in the NAND memory market, ranking second globally behind Samsung Electronics.

This agreement with SK Hynix represents the latest strategic move by Intel to concentrate resources on the development of technologies for 5G network infrastructure. Previously, Intel divested the majority of its modem business to Apple for approximately $1 billion, with Swan explaining at the time that this would allow Intel to “[dedicate] our complete attention to 5G, aligning it with the requirements of our worldwide customer base.”

Upon regulatory approval and completion of the transaction, SK Hynix, headquartered in Seoul, will assume control of Intel’s NAND SSD and NAND component businesses, along with its NAND wafer operations in Dalian, China. Intel will retain ownership of its Optane business, responsible for producing SSD memory modules. The companies anticipate receiving regulatory clearance by the end of 2021, with the complete transfer of assets, including Intel’s NAND-related intellectual property, scheduled for March 2025.

Until the transaction is fully finalized, Intel will continue to produce NAND wafers at the Dalian facility and will maintain all intellectual property rights pertaining to the manufacturing and design of its NAND flash wafers.

As highlighted by the Wall Street Journal, the Dalian facility constitutes Intel’s primary foundry location in China. Consequently, its sale to SK Hynix will substantially diminish Intel’s operational footprint in the region, particularly in light of ongoing trade restrictions imposed by the United States government on Chinese technology.

Intel announced its intention to utilize the proceeds from the sale to “accelerate its long-term strategic priorities, encompassing artificial intelligence, 5G networking, and the intelligent, autonomous edge.”

During the six-month period concluded on June 27, 2020, the NAND business generated approximately $2.8 billion in revenue for Intel’s Non-volatile Memory Solutions Group (NSG), contributing around $600 million to the division’s operating income. The Wall Street Journal reported that this accounted for the majority of Intel’s total memory sales during that timeframe, which totaled roughly $3 billion.

Seok-Hee Lee, CEO of SK Hynix, stated that the acquisition will enable the South Korean company to “enhance our business framework, broadening our innovative portfolio within the NAND flash market segment, mirroring our accomplishments in DRAM.”