According to unnamed analysts cited by Korean publication Business Korea, Chinese authorities are likely to approve Intel Corporation’s $9 billion sales of its memory fabrication facilities to South Korean memory manufacturer SK Hynix by the end of the year. After being scrutinized for anticompetitive risks, authorities in the United States, South Korea, and the United Kingdom approved the sale. The possibility of Chinese approval also suggests that Advanced Micro Devices, Inc (AMD), Intel’s smaller rival, will get the go-ahead for its bid to buy configurable integrated circuit designer Xilinx. However, according to PaRR, a confirmation for AMD is not guaranteed at this time.
SK Hynix will supply the majority of the cash if Intel’s contract with China is approved, although the intellectual property transfer between the two companies will not be completed until 2025. According to Business Korea, unidentified Chinese analysts are optimistic about a possible closing as early as the third week of December.
Intel likely to get a nod from Chinese authorities for the sale of its $9 billion facilities to SK Hynix
According to the publication:
Analysts say that China’s approval may come as early as this weekend or within this year at the latest.
The agreement was announced in October of last year, and there have been no major regulatory hurdles since then. Intel intends to use the proceeds, which will total $7 billion after approval and $2 billion after the final closing in March 2025, for a variety of purposes, as detailed in its press release:
Intel intends to invest transaction proceeds to deliver leadership products and advance its long-term growth priorities, including artificial intelligence, 5G networking, and the intelligent, autonomous edge.
On the artificial intelligence front, Intel currently offers its Xeon processor lineup, which is aimed at data center computing and competes with AMD’s EPYC lineup. They were introduced in 2019 and are made using Intel’s renamed Intel 7 manufacturing technology. This technology is comparable to Taiwan Semiconductor Manufacturing Company’s 7-nanometer (nm) technology in terms of the number of billions of transistors on a chip and overall density per millimeter squared (mm2) (TSMC).
The EPYC central processor units (CPUs) are manufactured by TSMC, however, only Intel’s Xenon includes built-in AI acceleration. AMD’s MI200 series high-performance computing and artificial intelligence accelerators, which are developed on a newer manufacturing process than Intel’s Xeon, take advantage of AMD’s capabilities as a CPU and GPU (graphics processing unit) designer. AMD’s cDNA GPU architecture is used in the MI200 series.
Business Korea does not provide any additional information other than brief comments on the possibility of the SK Hynix deal closing. The sale comes as Intel, TSMC, and Samsung cope with a record semiconductor shortage that some predict will persist until 2022 and then gradually ease.
If the Chinese government approves the deal, it could signal a more relaxed attitude toward AMD’s acquisition of Xilinx. According to a report from regulatory news services provider PaRR, the situation is still unclear.
The paywalled report, obtained by SeekingAlpha, states that the Chinese antitrust regulator is still evaluating AMD’s proposals to address any potential antitrust violations. However, PaRR mentions that authorities are working on the agreement, but the publication does not state that it will be completed by December.
AMD anticipates the merger to finish by the end of the year, and it went through the second step of Chinese regulatory review early this year. In addition to approval, the SAMR has the authority to proceed the deal to the third phase of investigations, which will last about two months.