SK hynix will take over Intel's NAND memory and storage business. The $9 billion acquisition includes Intel's SSD, NAND component and wafer business, as well as its Dalian memory manufacturing facility in China.

The deal does not include Intel's Optane memory business. Intel will continue to manufacture NAND wafers at the Dalian facility and retain all intellectual property related to the manufacture and design of NAND flash until the deal closes.

Intel and SK hynix aim to obtain regulatory approval by late 2021, with an initial payment of $7 billion taking place that time. However, the deal isn't expected to be finalized until sometime in 2025.

According to SK hynix, the acquisition will bolster its competitive standing in the storage and memory space, specifically around solid-state media. Intel's Non-volatile Memory Solutions Group (NSG) also stands to be a strong revenue generator for South Korean chipmaker.

Intel's NSG division generated nearly $2.8 billion in revenues during the first half of 2020, and nearly $600 million in operating income, according to Intel's latest earnings report.

Intel plans to invest the proceeds from the sale in key growth areas like artificial intelligence (AI), 5G, and edge compute.

Intel's exit from the flash market comes at a time when NAND is rapidly becoming a commodity market where scale matters and existing vendors are seeing increased competition from Chinese companies, said Patrick Moorhead, founder and principal analyst at Moor Insights and Strategy, in an email to SDxCentral. "It would have required Intel to invest tens if not hundreds of billions in capital expense over the long haul to be profitable. I think Intel is better off focusing on compute engines, networking silicon, and even Optane, which, all make its compute franchise stronger."

Analyst Jim Handy of The Memory Guy has a similar take, arguing that Intel has a history of starting and then selling memory business. "Intel doesn’t do well in memories and has shedded numerous memory businesses in the past: SRAM, DRAM, EPROM, EEPROM, PCM, and NOR flash. It simply stopped its bubble memory business," he wrote in a post.

However, Handy notes that SK hynix is more interesting. While NAND is not a new area of development for the South Korean chipmaker, he notes the company has been struggling financially as of late.

Handy added that while the company has had some successes in recent years — in 2018, the company developed the first change trap flash-based 96-layer flash module and a year later pushed that to 128 layers — the technology is incompatible with Intel's. "With the Intel technology, SK hynix will be managing two incompatible 3D NAND designs — charge trap and floating gate — which will prevent any near-term benefit from process synergies," he wrote.

Despite the incompatibility of the technologies, Handy expects SK hynix will benefit from the acquisition long term.