SK Hynix, a South Korean chipmaker, announced on Wednesday that the Chinese antitrust authority has approved its $9 billion acquisition of Intel Corp’s NAND and SSD (solid-state drive) division, completing the regulatory approval process in eight nations.
The merger agreement between the US chip giant and SK Hynix was reached in October of last year. Following the transaction, SK Hynix received approval from government watchdogs in South Korea, the United States, the European Union, Taiwan, Brazil, the United Kingdom, and Singapore.
“SK Hynix sincerely welcomes and appreciates the State Administration of Market Regulation’s merger clearance for the agreement,” the company said in a statement. By completing the remaining post-merger integration process, SK Hynix will improve its competitiveness in the NAND Flash and SSD markets.”
The deal, which is SK Hynix’s largest, will help the company expand its NAND SSD business and close the gap with market leader Samsung Electronics. Conversely, Intel indicated last year that it will keep its optane business to invest in more sophisticated technology. The American firm intends to sell its NAND division and focus on creating technology like as 5G network infrastructure, artificial intelligence, and edge computing.
A spokeswoman for SK Hynix stated that the first payment of $7 billion will be made by the end of this year, and the remaining $2 billion will be paid by March 2025. The South Korean chipmaker will acquire Intel’s NAND SSD, NAND component, and wafer businesses (together with NAND-related intellectual property and employees) as well as its NAND memory manufacturing plant in Dalian after the agreement is completed.
Due to the general tensions between the US and China, there has been apprehension that SK Hynix will not gain China’s approval for the deal. The authorization comes at the proper time and without substantial delay, according to SK Hynix, because the acquisition “is considered mutually beneficial” to all three countries.
China’s State Administration for Market Regulation announced on Wednesday that it has authorized the proposal, albeit with several five-year stipulations.
According to the statement, SK Hynix must increase the quantity of PCIe and SATA enterprise-class solid-state hard disks it produces, as well as supply the products at fair, reasonable, and nondiscriminatory rates. It further stated that SK Hynix should not compel customers in China to buy just SK Hynix or SK Hynix-controlled enterprises’ products.