[Featured Stock] SK Hynix Surges on Intel Acquisition and Samsung Xi'an Production Cuts 'Double Boost'

[Asia Economy Reporter Ji Yeon-jin] SK Hynix (000660) surged on the 30th following news that it has completed the first phase of the merger and acquisition (M&A) of Intel's NAND flash and solid-state drive (SSD) business, as well as due to the production cut impact at Samsung Electronics' Xi'an semiconductor plant.

As of 9:30 AM on the same day, SK Hynix was trading at 131,000 KRW, up 3.15% (4,000 KRW) from the previous day.

The news that SK Hynix has completed the first phase of the M&A of Intel's NAND flash and SSD business appears to have stimulated investor sentiment.

SK Hynix plans to pay Intel 7 billion USD and complete the first closing on this day. Immediately after the deal closing, SK Hynix will own Intel's NAND and SSD business along with the Dalian plant assets in China. This means that NAND and SSD performance will be incorporated into SK Hynix's results starting next year. SK Hynix will complete the transaction by paying the remaining 2 billion USD to Intel in March 2025 (second closing).

Samsung Electronics' production cut at its semiconductor plant in Xi'an, China, also contributed to the stock price increase. Samsung Electronics announced the day before that it had lowered the operating rate of its semiconductor plant in Xi'an, China, due to a lockdown order caused by the spread of COVID-19. Kim Kyung-min, a researcher at Hana Financial Investment, stated in a report on the same day, "The recent Xi'an lockdown and Samsung Electronics' production adjustment are likely to cause a supply-demand balance in the NAND flash sector and will have a positive impact on the stock prices of NAND flash suppliers."

He explained, "If global NAND flash shipments decrease by 6% and 2% in the first and second quarters of next year compared to previous forecasts, respectively, NAND flash is likely to avoid entering an oversupply phase and maintain supply-demand balance for six months."

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