An 8-inch Foundry in Korea
SK Hynix has decided to buy Key Foundry, an 8-inch foundry company in Korea, and delivered its acquisition intention to the company.
Key Foundry was originally a unit of now-defunct LG Semiconductor, which was established in 1979. In 1999, it became part of Hynix Semiconductor, which was created through the merger between LG Semiconductor and Hyundai Electronics. In 2004, the non-memory business of Hynix Semiconductor was spun off into Magnachip and sold off to foreign investors. Key Foundry was established by separating Magnachip’s foundry facilities in Cheongju, North Chungcheong Province.
In March 2020, Key Foundry was sold for 510 billion won to Magnus PEF, which was jointly established by private equity fund (PEF) management companies Alchemist Capital Partners and Gravity Private Equity.
SK Hynix invested about 207.3 billion won in Magnus PEF at the time. The Korean Federation of Community Credit Cooperatives remains the largest investor in Magnus PEF with a 50 percent stake plus one share. SK Hynix is expected to invest at least 400 billion won additionally to take over Key Foundry.
SK Hynix’s acquisition offer came earlier than expected as SK Hynix System IC, a subsidiary of SK Hynix, stabilized its business in China, and Key Foundry made some progress in its management normalization. SK Hynix also took into consideration the ongoing severe shortage of 8-inch foundry facilities.
However, analysts predict that there will be a tug-of-war between the seller and the buyer over a final M&A deal.