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According to the Wall Street Journal, Intel Corporation and South Korea’s SK Hynix will reach an agreement on the sale of the memory chip unit. The report pointed out that SK Hynix will receive Intel’s storage business at a price of approximately US$10 billion. This move will reposition the semiconductor giant to get rid of increasingly challenging and historically important areas.

People familiar with the matter said that assuming the negotiations will not break down at the last minute, the two companies will likely announce a deal on Monday. We have no way of knowing the details of the transaction, including what SK Hynix may purchase.

The NAND flash memory products produced by Intel’s division are mainly used in equipment such as hard disks, U disks and cameras. Due to the fall in flash memory prices, the American chip maker has been considering exiting the business.

Although Intel is known for its central processing unit as the core of personal computers, the company has deep roots in the memory business. It started as a memory manufacturer in the late 1960s, and fierce competition from the emerging electronics industry in Japan in the 1980s caused the company to change its direction of development.

Although it started to recover at the end of last year, the memory chip market plummeted in 2018. Analysts predict that with the surge in data storage, the NAND device market will remain strong in the next few years.

Nevertheless, Intel CEO Bob Swan (Bob Swan) said in April that the company must obtain more attractive returns from the NAND business and suggested that this goal can be achieved through “partnerships.”

Intel’s Chief Financial Officer, George Davis, said in March this year that although the flash memory market continues to grow, including in large data centers, “we can’t make a profit from it to make this kind of profit. What we want to see Return.”

In January of this year, Intel sold its joint venture with Micron Technology to the latter for US$1.5 billion. The joint venture focused on an advanced storage technology called 3D XPoint.

As smaller competitors gain market share, Intel, which has a market value of approximately $230 billion, is under increasing pressure. Its stock price has fallen by about 10% this year, while the Philadelphia Semiconductor Index has risen by about 30% this year. When Intel said in July that its performance in the second half of the year would be lower than expected, and there was a further delay in the launch of its ultra-high-speed seven-nanometer chip technology, because the technology is the basis of the next-generation central processing unit, which caused the company’s stock price to fall By more than 15%.

Data from Mercury Research shows that although Intel has been working hard to mass-produce its most advanced chips, rival AMD’s market share in personal computer CPUs in the first quarter climbed by more than 17%, which is more than double the amount five years ago. , And Intel has almost all of the remaining market share.

Intel is scheduled to announce its third-quarter earnings on Thursday afternoon.

The United States’ efforts to contain the rise of China’s technology industry and restrict exports to Chinese companies (such as China’s leading telecommunications equipment manufacturer Huawei Technologies Co., Ltd.) have shaken the memory chip market. Japanese memory chip maker Kioxia Holdings Corp, which is owned by a consortium led by private equity firm Bain Capital, delayed its most anticipated IPO this year due to this situation last month.

Intel’s advanced flash memory is called 3D NAND because it has multiple layers of memory cells stacked together. It is produced in Dalian, China. This factory is Intel’s only major chip manufacturing base in China. If it is included in sales, It will mark a serious decrease in the company’s presence in China.

As industry players seek to scale and expand their product portfolios to support more and more everyday items connected to the Internet, consolidation has swept the semiconductor industry.

ADI agreed in July to acquire Maxim Integrated Products Inc. for more than US$20 billion, while Nvidia Corp. agreed in September to acquire a British chip design company backed by SoftBank Group Corp. for US$40 billion. Arm Holdings.

According to the “Wall Street Journal” report earlier this month, AMD is negotiating the acquisition of Xilinx. People familiar with the matter said that if the negotiations do not break down, the two parties are discussing an agreement that may be reached this week or next week.

Some companies are seeking to downsize and narrow their focus. Last year, Broadcom Inc. (Broadcom Inc.) sought to sell its radio frequency (RF) division, which is part of its wireless chip business, which produces filters for mobile phones to filter signals. But then they decided not to sell it.