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SK Hynix gets China approval to take over Intel’s NAND business

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South Korean chipmaker SK Hynix said on Wednesday it has received merger clearance from the Chinese antitrust authority for its $9 billion acquisition of Intel Corp’s NAND and SSD (solid-state drive) business, clearing the final hurdle to completion of securing regulatory approval in eight jurisdictions.

Last October, the U.S. chip giant and SK Hynix reached the acquisition deal. Following the agreement, SK Hynix obtained nods from watchdog agencies in South Korea, the U.S., the European Union, Taiwan, Brazil, Britain and Singapore.

SK Hynix said in its statement: “SK Hynix sincerely welcomes and appreciates the State Administration of Market Regulation’s merger clearance for the deal. SK Hynix will enhance its competitiveness of NAND Flash and SSD business by continuing the remaining post-merger integration process.”

The acquisition, which is SK Hynix’s largest acquisition deal, will help SK Hynix expand its NAND SSD business and narrow the gap with market leader Samsung Electronics. Meanwhile, Intel will continue to retain Optane business to invest in more advanced technology, Intel said last year. The U.S. company plans to divest the NAND unit and double down on developing technology, including 5G network infrastructure, artificial intelligence and edge computing.

SK Hynix will make the first payment of $7 billion by the end of this year and the remaining $2 billion by March 2025, a spokesperson at SK Hynix confirmed. Once the deal completes, the South Korean chipmaker will take over Intel’s NAND SSD, NAND component and wafer businesses (including NAND-related intellectual property and employees), and its NAND memory manufacturing facility in Dalian.

There has been concern that SK Hynix will not receive China’s permission for the deal amid the tensions between the U.S. and China. SK Hynix said the approval comes at the right time without a significant delay as the deal “is deemed mutually beneficial” for all three countries.

China’s State Administration for Market Regulation said in its statement on Wednesday that it had approved, but with a number of conditions that will last for five years.

The conditions include that SK Hynix should expand its production quantity of PCIe and SATA enterprise-class solid-state hard disks products, and supply the products at fair, reasonable and nondiscriminatory prices, according to the statement. It also said that SK Hynix should not force customers in China to exclusively purchase products from SK Hynix or companies controlled by SK Hynix.

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