SK Hynix in talks to acquire South Korean chip contract manufacturer

The world’s second-largest memory chip maker, SK Hynix Inc, has requested talks to acquire South Korea-based Key Foundry, a chip contract manufacturer, said Reuters quoting a South Korean newspaper report.

SK Hynix has expressed intention to negotiate for the full acquisition of the 8-inch wafer foundry, Korea Economic Daily reported on Monday citing unnamed sources in the tech and investment banking industries, as per Reuters.

According to the report, SK Hynix said that it is considering various measures to expand its foundry business, but nothing has been finalised.

SK Hynix is already a minority investor in Key Foundry, having infused about 207 billion won ($181.93 million) into a private equity fund last year that owns the chip contract manufacturing firm, and now is interested in buying out the rest, Korea Economic Daily said.

Key Foundry has a chip manufacturing capacity of 82,000 8-inch wafers per month, and is the only pure-play foundry in Korea, with the ability to make chips for applications in the consumer, communications, computing, automotive and industrial industries, according to its website.

SK Hynix has reportedly said that it is considering doubling its chip contract manufacturing capacity from a low base in ways that could include M&A. Currently, memory chips make up almost all of SK Hynix’s business, with logic chips including chip contract manufacturing only taking up 2% of revenue, as per Reuters.