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| SK hynix headquarters in Icheon, Gyeonggi Province / Courtesy of SK hynix |
By Kim Bo-eun
SK hynix, the world's second-largest memory chip maker, is seeking to acquire a 100 percent stake in Key Foundry, the former contract manufacturing unit of Korea-based Magna Chip.
SK hynix could not confirm or offer details, but the firm appears on track to negotiate the acquisition of a full stake in Key Foundry. The acquisition will expand SK hynix's foundry capacity and strengthen its non-memory division.
When deals are underway, the involved entities are typically required to keep mum as they sign a non-disclosure agreement (NDA). But SK hynix released a statement last week signaling the possibility of an acquisition, after the chipmaker's finance chief said in a conference call last month that the chipmaker will invest in foundries using 8-inch wafers.
SK hynix CEO and Vice Chairman Park Jung-ho pledged in the statement to double the firm's foundry capacity through various means, including acquisitions. An SK hynix official said the company plans to invest in the 8-inch foundry business to develop and mass-produce chips for local fabless firms, as well as assist their entry into overseas markets.
Key Foundry operates an 8-inch foundry facility in Cheongju, North Chungcheong Province, where SK's chief flash memory facilities are located. Key Foundry was taken over for 510 billion won in March 2020 by a fund managed by Alchemist Capital Partners Korea and Credian Partners.
SK hynix took part in the acquisition in the form of a 207.3 billion won investment into the fund. MG Community Credit Cooperatives was the other major investor. The SK affiliate is now seeking to take over the remaining shares of Key Foundry held via the fund. The chipmaker is expected to invest at least 400 billion won for the remaining stakes.
SK hynix is set to negotiate the investment with the fund-managing entities and a deal could be reached before the end of the year. "Nothing has been finalized as of yet," a senior SK hynix official said, Tuesday.
Park's remarks last week came amid a global shortage of non-memory chips. SK hynix's investments to expand its foundry capacity coincide with the government's aim of setting up the world's largest chip supply chain here by 2030 with private-sector investments.
SK hynix's takeover of Key Foundry is set to boost its foundry business. Currently, SK hynix' foundry business accounts for only 2 percent of total sales. SK hynix currently operates a small foundry business in China and its foundry facilities in Cheongju are currently being transferred to China to move the production base closer to clients.
SK hynix shares closed at 121,000 won on Tuesday, up 2.98 percent from the previous day's close on expectations of the company pushing ahead with the investment in Key Foundry.
