The deal has been under negotiation for the last six months (see SK Hynix opens talks on buying Key Foundry) and is seen as being in-line with SK Hynix’ goals of expanding its non-memory footprint.
SK Hynix already owns a part of Key Foundry as it was part of a consortium that bought the foundry operation out from Magnachip Semiconductor.
Key Foundry operates a 200mm wafer fab that can make power management ICs, display drivers and microcontrollers as a contract manufacturer.
Key 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 (see Foundry chip company formed in Korea ). The buyer was a consortium formed by Alchemist Capital Partners Korea Co. Ltd. and Credian Partners Inc. and it was thought at the time that SK Hynix had a significant share in the company.
SK Hynix contributed 207.3 billion won (about US$180 million) to the deal, the Korea Economic Daily reported. The balance of Magnachip, a maker of analog, mixed-signal and power chips, was on track to be sold to a consortium organized by China’s Wise Road Capital until the United States intervened (see Magnachip in play with last-minute rival bid).
Magnachip remains a public company traded on the New York Stock Exchange.
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 wafers per month.
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