SK Hynix Inc.’s $9 billion acquisition of Intel Corp.’s Nand storage unit has been cleared by European regulators. This is another step forward towards sealing a deal to strengthen the Asian chipmaker’s position in the booming memory market.
The regulator said in a statement on Friday that the European Commission has approved the acquisition. Hynix had earlier secured clearance from U.S. regulators and awaits approval from the U.K. and China. Hynix, which announced the deal in October, is trying to win approval from the remaining countries this year.
In the wake of a global chip shortage, the clearance comes as the Biden administration is reviewing semiconductor supply chains. If the Icheon, South Korea-based Hynix succeeds in getting the signoffs from the remaining governments, it will cement its position as the largest Nand producer after Samsung Electronics Co. Meanwhile, Intel procures sufficient funds to invest in its faster-growing logic businesses.
Hynix will pay $7 billion in the deal’s first phase and the rest by March 2025. By the end of 2021, Hynix is set to take over Intel’s facility in Dalian, China, boosting its market share of flash memory components used in computers and other devices to more than 20%. As of the fourth quarter of 2020, according to research firm TrendForce, Hynix’s Nand market share was 11.6%, while Intel’s was 8.6%, and Samsung dominated with 32.9% of the market.
In November, Hynix Chief Executive Officer Lee Seok-hee said that the company plans to more than triple its flash-memory revenue over five years through the acquisition.
“The proposed acquisition will help SK Hynix expand its global footprint, adding complementary memory technology,” the company said in a statement, according to Bloomberg. “SK Hynix expects to enhance its expertise through the acquisition.”