Intel is selling its memory chip and storage business NAND to the South Korean company SK Hynix for $9 billion.

The deal includes Intel’s SSD business, NAND component and wafer business, and the Dalian NAND memory manufacturing facility in China. Intel is not selling its advanced memory chip technology business, Optane.

“For Intel, this transaction will allow us to further prioritize our investments in differentiated technology where we can play a bigger role in the success of our customers and deliver attractive returns to our stockholders,” chief executive officer Bob Swan said in a statement.

Intel said it would invest proceeds from the transaction in long-term growth priorities.

The NAND business represented some $2.8 billion in revenue for the six months ended June 27.

The deal would vault SK Hynix from fourth place in the global rankings of NAND flash chip makers to second place behind its rival Samsung. SK Hynix currently has a market share of 11.7% according to TrendForce. Adding Intel’s business would give it 23.2%.

Analysts raised concerns about the cost of the deal, which is the largest acquisition ever for SK Hynix.

“Hynix is now entering the hyperscale control chip business by purchasing Intel’s business. Although there is some skepticism about the price of the deal, I think this won’t be a burden because it will ensure solid long-term cash flow,” HMC Securities analyst Greg Roh said. “The market consolidation is good news for Korean memory chipmakers and will alleviate oversupply issues.”

In July, Intel said production of its 7 nanometer chips would be delayed until 2022 as it struggled to match rivals Taiwan Semiconductor Manufacturing Company and Samsung, who have already begun sales.

The companies said they expected to secure the necessary governmental approvals in late 2021. The deal is expected to close in March 2025.

Jung Yeon-Je/AFP via Getty Images

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