Why does SK Hynix want to sell its chip facility in southwest China?
South Korean chipmaker SK Hynix’s potential deal to offload a packaging plant in southwest China is part of a strategic pivot towards higher-margin artificial intelligence (AI) memory products, according to analysts. But a sale might not be straightforward, as the memory chip giant would need to navigate valuation hurdles and a volatile chip cycle, they cautioned. SK Hynix said on Monday it was…
SK Hynix, a prominent South Korean chipmaker, is considering selling its packaging plant located in southwest China. This potential deal is part of the company's strategic shift towards higher-margin artificial intelligence (AI) memory products, according to industry analysts. However, the company would face valuation challenges and a volatile chip cycle during the sale process.
The Chongqing facility, which has been operational as a back-end hub for NAND flash memory products, is expected to be valued around US$3 billion if sold. While the company has not made any final decisions, this move could help SK Hynix recoup capital from lower-margin legacy products and fund its ambitious expansion plans in South Korea.
Potential buyers could include integrated chipmakers such as Yangtze Memory Technologies Co, as well as outsourced semiconductor assembly and testing (OSAT) specialists like JCET Group and Tongfu Microelectronics. Although regulatory hurdles might be lower for packaging and testing assets compared to advanced wafer fabrication facilities, execution risks and the eventual decline of the memory market remain concerns.
SK Hynix plans to resume construction on a second NAND plant in Dalian, aiming to increase output by approximately 50%, according to recent Korean media reports.
Written by urgent.news from SCMP Tech's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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