SEOUL, Oct. 29 (Korea Bizwire) — SK hynix Inc., South Korea’s second-largest chipmaker, said Friday it signed a deal to buy a local chip contract manufacturer for 575.68 billion won (US$492 million), as part of efforts to enhance its presence in the non-memory sector.
SK hynix said the acquisition of Key Foundry, the 8-inch wafer foundry manufacturer, from Magnus private investment partnership (PEF), will help double the company’s chip contract manufacturing capacity.
Key Foundry, which is based in the central city of Cheongju, about 140 kilometers south of Seoul, makes chips for power management, display drivers and microcontroller unit semiconductors.
SK hynix runs a foundry business through its affiliate SK hynix system IC, which has a similar production capacity to that of Key Foundry.
In May, SK hynix Vice Chairman Park Jung-ho said the company will “review various strategic options, including capacity expansion in South Korea and mergers and acquisitions” to double its foundry production capacity to around 200,000 sheets of wafers per month.
The chipmaker said at that time it will first invest in the 8-inch foundry business to tackle global chip shortages, while helping the overseas expansion of domestic fabless companies.
SK hynix is a traditional memory chip manufacturer, with its sales of non-memory products and its foundry business only taking up 2 percent of its total revenue.
Meanwhile, the company also plans to build four additional chip fabrication factories in a semiconductor cluster in Yongin, 49 kilometers south of Seoul.
The company said construction for its first new fab is expected to start in 2024, and mass production from that facility could be possible as early as 2025.