SK Hynix’s $9 bln deal is chip sector’s quick fix

HONG KONG: SK Hynix’s chip deal is just what the sector needs right now. South Korea’s semiconductor giant will buy Intel’s NAND memory business for $9 billion – its largest acquisition ever. Less competition might prop up prices, which have plunged on uncertain demand. In the long term, stronger chipmakers may stand a better chance against Chinese entrants.

Tuesday’s all-cash deal will propel SK Hynix to become the world’s second largest maker of so-called NAND chips, widely used in PCs, servers and smartphones. It’s a prudent move for Intel boss Bob Swan, who has been grappling with product delays and technological fumbles while fending off competitors like AMD and Nvidia, which are muscling in on the company’s main processor business. Offloading the NAND unit, which accounted for less than a tenth of total first-half sales, should help Intel refocus.