China okays SK Hynix’s acquisition of Key Foundry – report
Chinese regulators have approved SK Hynix’s acquisition of Key Foundry, according to a Korea IT News report.
Memory chip maker SK Hynix Inc. has said it has agreed to acquire South Korean Key Foundry for 576 billion won (about U$492 million) back in October 2021 after six-months’ negotiations (see SK Hynix doubles foundry capacity with Key Foundry buy).
Now the Anti-Monopoly Bureau of China’s General Administration, for market supervision and management, has reportedly completed the final stages of approval.
Key Foundry operates a 200mm wafer fab that can make power management ICs, display drivers and microcontrollers as a contract manufacturer. The foundry was formed by the buy-out of Magnachip Semiconductor’s Cheongju-based foundry facility for 510 billion won (about US$450 million) in 2020.
SK Hynix has an existing 200mm foundry business – SK Hynix System IC – which it recently relocated from Cheongju in Korea to Wuxi in China. That foundry has a capacity of 100,000 wafers per month while Key Foundry has a manufacturing capacity of about 80,000 or 90,000 wafers per month.
However, it is thought that semiconductor manufacturing equipment lead times and shortages could restrict SK Hynix’s ability to ramp production in the short term.
The move is seen to be in line with SK Hynix’s plan to diversify away from a dependence on memory component sales. It would make SK Hynix South Korea’s second foundry behind Samsung and could put into the top ten of global foundries.
China’s approval comes despite the fact that there was a plan for Chinese interests to acquire the whole of Magnachip, a public company listed on the New York Stock Exchange. This was blocked by a counterbid in 2021 and Magnachip remains a public company.
Related links and articles:
SK Hynix doubles foundry capacity with Key Foundry buy
SK Hynix opens talks on buying Key Foundry
Magnachip in play with last-minute rival bid
SK Hynix mulls buying MagnaChip fab, foundry business