SK hynix Acquiring the Intel NAND Storage Business in a Big Shift

[Patrick Kennedy]

SK hynix is acquiring the Intel NAND storage business in a big industry shift that is going to re-balance the data center portfolios of each company

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[Evan]

Didn’t see that coming, 9B seems a lot to be paying. Unless SK really wants the floating gate tech, but didn’t think they had any issues with their own charge trap process. kind of sad, nothing at all against SK but always liked intel SSD’s.

 

[i386]

Didn’t see that coming, 9B seems a lot to be paying. Unless SK really wants the floating gate tech, but didn’t think they had any issues with their own charge trap process

Maybe they want the ip for the licensing royalties? I think WD (ex HGST) uses a lot of Intels technology in their products.

 

[Patrick]

$2.6B in revenue and $600M OI in the first 6 months of the year. Assuming they can extend a full year that is $9B paid for $1.2B/ year in income and ~$5.2B revenue.

Synergies can be large, but not as big as a full distinct entity would see since there are already a lot of shared functions at Intel.

To me, I thought the opposite, this is probably lower than I expected.

One less NAND manufacturer and drive manufacturer probably increases pricing by 10-15% by lowering oversupply in bad industry periods. As a drive maker, instead of just a NAND maker, and consolidating that market more one can probably get a few percent better margins.

As part of SK hynix that $600M OI in 6-months is probably $700-750M of OI. By the time that is pushed up the SK hynix corporate valuation ratios, this is going to be a win for them.

A bigger question is what happens to the channel/ partners. Intel did a lot of cross-selling.

 

[lunadesign]

What I'm curious about is what does this mean for end users looking to buy Intel enterprise SSDs in the next year or two?

 

[Evan]

What I'm curious about is what does this mean for end users looking to buy Intel enterprise SSDs in the next year or two?

not a lot i suspect since it will still take a while for the deal to get approved and closed and then there is the transition period.