The sale price is less than 2X revenue. All of the margin in flash memory has been sucked up by cloud providers and Apple.
Intel exits memory business, sale to Hynix for $9B
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Re: Intel exits memory business, sale to Hynix for $9B
#12Does Intel only sold the NAND manufacturing parts to SK Hynix or it also includes the SSD controllers IP? Because most of Intel SSD performance came from the controller not the NAND flash themselves, in fact Intel usually lag behind in NAND flash manufacturing.
Re: Intel exits memory business, sale to Hynix for $9B
#13Yet another instance of an industry giant selling off core parts of the business. Are Intel in so desperate need of cash?!
How is the hyper-competitive, low-margin, commodity NAND business core to what Intel does or aspires to do? (Intel is of course not doing their best at their core, but this does not seem to be an instance of it IMO. This is more analogous to exiting the DRAM business early in their existence)
> How is the hyper-competitive, low-margin, commodity NAND business core to what Intel does or aspires to do?
Because that "commodity" gives a company a steady revenue stream. The less diversification a business has, the more vulnerable it is in case of issues (e.g. the fiasco that is the new fab process sizes), market demand shifts or other external events (wars, tariff / trade wars, pandemics, economic crises).
Intel is now trading that revenue stream for a one time cash injection, probably to get back on their feet regarding the mentioned new fab processes - but if that bet fails, they're out of all the money they spent AND don't have that revenue stream anymore.
In my opinion this is a dangerous short-sighted move driven by bean counters with next-quarterly-only incentives...
Re: Intel exits memory business, sale to Hynix for $9B
#14Yet another instance of an industry giant selling off core parts of the business. Are Intel in so desperate need of cash?!
How is the hyper-competitive, low-margin, commodity NAND business core to what Intel does or aspires to do? (Intel is of course not doing their best at their core, but this does not seem to be an instance of it IMO. This is more analogous to exiting the DRAM business early in their existence)
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Re: Intel exits memory business, sale to Hynix for $9B
#15Intel's NAND flash was overshadowed by their Optane (not included in the sale) and lagging behind Hynix and Samsung, so I guess this isn't such a bad move. The cynical take is that the CFO running Intel is attempting a bunch of standard corporate restructuring strategies to delay the effects of their slowing technical innovation. It is definitely concerning from a US technical superiority standpoint to consider that…
The real shitshow starts when the CFO becomes the CEO (as is usually the case), so Intel is pretty much dead as is US tech innovation on this scale (until VCs do what China does and start pouring money into hard stuff, not just fluffy software).
Fluffy software drives demand for fancy hardware. Intel valuation wouldn’t be where it is without growing software market.
Re: Intel exits memory business, sale to Hynix for $9B
#16Yet another instance of an industry giant selling off core parts of the business. Are Intel in so desperate need of cash?!
It's also about financial engineering, financial engineers proselytise people into believing the idea that all business of a company need to be in a single profitability band, or the financial magical doom will come.
Re: Intel exits memory business, sale to Hynix for $9B
#17The sale price is less than 2X revenue. All of the margin in flash memory has been sucked up by cloud providers and Apple.
No, it wasn't. Lazy salesmanship did. Go and look how much margin a distributor still have wholesale for mainstream NAND flash.
Re: Intel exits memory business, sale to Hynix for $9B
#18Intel's NAND flash was overshadowed by their Optane (not included in the sale) and lagging behind Hynix and Samsung, so I guess this isn't such a bad move. The cynical take is that the CFO running Intel is attempting a bunch of standard corporate restructuring strategies to delay the effects of their slowing technical innovation. It is definitely concerning from a US technical superiority standpoint to consider that…
The real shitshow starts when the CFO becomes the CEO (as is usually the case), so Intel is pretty much dead as is US tech innovation on this scale (until VCs do what China does and start pouring money into hard stuff, not just fluffy software).
> until VCs do what China does and start pouring money into hard stuff, not just fluffy software
VCs won't do that, it's not their business model. The only way out is government funding - the way it has been for decades.
Re: Intel exits memory business, sale to Hynix for $9B
#19Earlier quoted context omitted.
The real shitshow starts when the CFO becomes the CEO (as is usually the case), so Intel is pretty much dead as is US tech innovation on this scale (until VCs do what China does and start pouring money into hard stuff, not just fluffy software).
Fluffy software drives demand for fancy hardware. Intel valuation wouldn’t be where it is without growing software market.
> Fluffy software drives demand for fancy hardware.
Fluffy hardware drives demand for fancy semiconductors. Intel valuation wouldn’t be where it is without... eh, what?
And this is where the skeleton in the closet is. For a major silicon vendor, it becomes more, and more scary to not simply get on the wrong side with chip manufacturer, but even just missing on the next best deal possible.
Companies that actually make all those chips don't matter as much when you are a 3rd-4th-5th tier company in your niche, and they don't care much about you. But the moment you become a bigger fish, your stakes become much, much higher. If a popular part (like a cellphone SOC) vendor gets a 10% worse fab deal than its competitor, that part vendor is likely on the way out.
In fact, it's a long going "conspiracy theory" in the industry that chip makers keep playing their biggest clients against each other to prevent any of them getting too much negotiating power.
Re: Intel exits memory business, sale to Hynix for $9B
#20A small fix to the HN title: it's about NAND (flash) memory, so basically "storage/SSD", not RAM "memory".
Thanks. I was about to ask the same question
Indeed. I was briefly foxed as well, given Andy Grove talks about Intel bailing on the memory business back in the 80s right at the start of High Output Management.