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SK SK Hynix plans to set up a joint venture factory in China and focus on chip foundry
In the evening of December 20th, Beijing time, South Korean media reported that SK Hynix, South Korea’s second-largest chipmaker, is considering setting up a joint venture factory in China to expand its foundry business. The move is seen as part of the company’s broader strategy to strengthen its position in the global semiconductor industry.
According to insiders, SK Hynix’s board is expected to discuss the establishment of the joint venture in an upcoming meeting. The new factory would focus on manufacturing chips for other companies that do not have their own semiconductor production facilities. This could open up new opportunities for SK Hynix to serve a wider range of clients in the rapidly growing Chinese market.
A key player in this deal is SystemIC, a wholly owned subsidiary of SK Hynix established in July of this year. According to sources, SystemIC will hold a 50% stake in the Chinese joint venture. Analysts believe that this partnership could significantly boost SK Hynix’s presence in the system chip sector and enhance its competitive edge.
Notably, the Chinese Ministry of Commerce has begun reviewing the sale of Toshiba’s chip business, with officials expressing concerns about SK Hynix's potential role in the transaction. The evaluation is ongoing, and there are growing worries about the impact of the deal on market competition.
Earlier this year, in September, the Bain Capital consortium finalized a $18 billion agreement to acquire Toshiba’s chip business. As part of the deal, SK Hynix is set to provide convertible debt financing, which could give it up to 15% voting rights in the newly formed entity. This has raised questions about whether the transaction could create an imbalance in the semiconductor market.
Chinese anti-monopoly officials are closely watching the situation, fearing that if the deal is approved without conditions, SK Hynix could gain too much influence over the Toshiba chip business. This concern highlights the increasing scrutiny of major tech transactions involving foreign players in China.