"Mr. Chips" Slides on Sale to Hynix

Intel (NASDAQ:INTC) has agreed to a $9-billion deal to sell most of its memory business to South Korea’s SK Hynix as it moves toward more diverse technologies while shedding a major Chinese factory at a time of deepening trade friction between Washington and Beijing.

The company known colloquially as "Mr. Chips" said it will keep its "Optane" business of more advanced memory products, which analysts say are mostly produced in the United States.

According to the plan confirmed by the companies on Tuesday, SK Hynix will acquire Intel’s NAND memory chip and storage business, including a related manufacturing site in the northeastern Chinese city of Dalian. SK Hynix said the companies expect to get required governmental approvals for the deal by late 2021.

The transaction, if completed, could reportedly make SK Hynix the world’s second-largest provider of NAND flash memory chips behind Samsung Electronics, another South Korean chip giant.

Demand for flash memory has strengthened in recent months due to buying of personal computers and servers as the coronavirus pandemic forces millions to work from home.

Intel will keep its "Optane" business of more advanced memory products, which analysts say are mostly produced in the United States. The company said it plans to invest proceeds from the transaction into advancing long-growth priorities, including technologies related to artificial intelligence and fifth-generation wireless networks.

INTC shares gave back 81 cents, or 1.5%, to $53.77, early Tuesday.