'The Final Gateway' SK Hynix Awaits Approval for Intel NAND Acquisition from China

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[Asia Economy Reporter Jeong Hyunjin] SK Hynix is currently only waiting for approval from China regarding its acquisition of Intel's NAND flash business. Although China has been strict with large semiconductor mergers and acquisitions (M&A) in the past, the market is placing more weight on the possibility of approval this time, as there are no concerns about market monopolization in this acquisition.

According to industry sources on the 24th, the Competition and Consumer Commission of Singapore (CCCS) recently gave unconditional approval for SK Hynix's acquisition of Intel's NAND memory business. As a result, SK Hynix has received acquisition approvals from seven of the eight countries under review (the United States, EU, South Korea, Taiwan, Brazil, the United Kingdom, and Singapore), leaving only China's approval decision pending.

Once China’s hurdle is cleared, SK Hynix’s acquisition of Intel’s NAND business will be virtually finalized. SK Hynix signed a contract last October to acquire Intel’s NAND flash and SSD business units for $9 billion (approximately 10.4 trillion KRW) and filed for a merger notification in January this year. Since then, it has undergone antitrust reviews in major countries. Given the significant impact of global semiconductor company M&As on the market, approval must be obtained from key countries with vested interests. Each country’s antitrust authorities must grant permission to prevent any single company from monopolizing the market.

Industry insiders believe that SK Hynix will face no major issues obtaining China’s approval because there are no concerns about market monopolization in the Intel NAND business acquisition. According to market research firm TrendForce, SK Hynix held a 12.3% share of the global NAND flash market in the first quarter of this year, while Intel held 7.5%. Even combined, their market share does not surpass Samsung Electronics’ 33.5%.

In particular, since Intel’s NAND production plant is located in Dalian, China, and this plant is included in the acquisition, it is expected that NAND production will continue at this facility once the acquisition is completed. SK Hynix signed a memorandum of understanding (MOU) with the Dalian local government on January 29 to pursue new investments, and it is also making investments in Wuxi, China. Considering these factors, the Chinese government is likely to approve the acquisition.

However, since China’s antitrust authorities have previously delayed or denied approval for global semiconductor company M&As, the market is closely monitoring the situation until the end. In March, Applied Materials (AMAT) of the United States decided not to acquire Japan’s Kokusai Electric due to delays in China’s review process. Also, the merger agreement between U.S.-based Qualcomm and Dutch company NXP in 2016 was canceled because Chinese authorities did not approve it.

An SK Hynix official stated, “We are communicating with China’s antitrust authorities regarding the Intel NAND acquisition review,” adding, “We will strive to obtain smooth approval.”

This content was produced with the assistance of AI translation services.