Acquisition to Boost Foundry Capacity
SK Hynix appears to be close to wrapping up the acquisition of Key Foundry, a Korean semiconductor foundry specializing in analog IC.
Key Foundry has recently sent a letter to its major clients, suggesting that the process of the company's acquisition by SK Hynix will be completed soon. “Even if the M&A process is completed, our business relationship and foundry services will continue,” the letter said.
At the end of October last year, SK Hynix announced that it would acquire a 100 percent stake in Key Foundry. To complete the deal, the Korean chipmaker must pass antitrust reviews in major countries, including Korea, China, the United States and Europe. Recently, as competition for technological hegemony among countries intensifies, an anti-monopoly review is becoming tougher in the semiconductor field. In February, Nvidia tried to acquire ARM, the world’s largest semiconductor intellectual property (IP) company, for 80 trillion won, but the deal was aborted due to opposition from multiple countries.
In March, the Korean Fair Trade Commission approved the M&A deal between SK Hynix and Key Foundry. It is unknown whether the rest of the countries approved the corporate marriage.
SK Hynix aims to expand its 8-inch wafer foundry business, which has recently been in explosive demand, by acquiring Key Foundry. Recently, a severe supply shortage is taking place in the 8-inch wafer foundry industry.
SK Hynix has a foundry subsidiary named SK Hynix System IC in Wuxi, China. The affiliate runs a foundry that can process about 100,000 8-inch wafers per month.
Key Foundry has a factory with a capacity of 90,000 8-inch wafers right next to SK Hynix's campus in Cheongju, North Chungcheong Province. The acquisition of Key Foundry will boost SK Hynix's production capacity to close to 200,000 sheets of 8-inch wafers. Combined foundry sales of the two companies amounted to 1.32 trillion won in 2021. Their combined production capacity and sales exceed those of DB HiTek, the 10th largest foundry player in the world.