: China waves a green signal to SK hynix-Intel deal #IndiaNEWS #Business The removal of the last regulatory hurdle for SK hynixs acquisition of Intels non-volatile memory business will likely accelerate

China waves a green signal to SK hynix-Intel deal #IndiaNEWS #Business
The removal of the last regulatory hurdle for SK hynixs acquisition of Intels non-volatile memory business will likely accelerate the chipmakers plan to expand its presence and enhance competitiveness in the global NAND market, analysts said on Thursday.

On Wednesday, the Chinese antitrust regulator gave the much-awaited green light for the South Korean companys merger deal signed in October last year to acquire Intels NAND unit for billion.

The deal, the largest acquisition in South Korean history, includes the U. S. firms solid-state drive (SSD) business and a NAND flash chip plant in Dalian, China.

The approval has brought the South Korean chipmaker one step closer to its goal of significantly reinforcing its NAND flash business to become the worlds second-largest player in the segment, reports Yonhap news agency.

The deal will enable SK hynix to achieve economies of scale in the memory market with high fixed production costs and to secure Intels technological prowess and its customer base, Kim Sun-woo at Meritz Securities wrote in his latest report.

But the massive spending for the deal could jeopardize the companys balance sheet, for the time being, which, he warned, can strain its capital expenditure plan for its cash-cow DRAM business.

Kim Kyung-min, a semiconductor analyst from Hana Financial Group, raised the target price of SK hynix to 165,000 won (9) from 130,000, as she expected the performance of Intels NAND business, about 5-6 trillion won in annual sales, will be reflected in SK hynixs earnings next year.

Following the announcement of the deal last year, SK hynix obtained approvals from antitrust regulators in all seven countries involved up until July, except for China, raising concerns that the deal could fall victim to the ongoing tech rivalry between the U. S. and China.

There has been speculation that it would be difficult for SK hynix to win Chinas approval for the deal, or any approval could be delayed significantly given the complex situation involving interests of various countries amid tensions between the U. S. and China for the semiconductor sector, the company said in a statement.

It added that the approval came at the right time without a significant delay as the deal is deemed mutually beneficial for all three countries.

Now with the final clearance, SK hynix said it will focus on completing the remaining integration process, which is expected to continue until early 2025.

SK hynix is the worlds second-largest DRAM maker, with a market share of 27. 2 percent in the third quarter, behind the dominant player Samsung Electronics with 44 percent, according to analyst firm TrendForce.