Bob Swan, CEO, Intel. Photo credit: Stuart Isett for Fortune Magazine, licensed under Creative Commons

Semiconductor giant Intel has announced that it’s reached a deal to sell off its NAND memory and storage business to South Korean company SK Hynix, which will pay $9 billion for the unit. SK Hynix will make an initial payment of $7 billion for Intel’s main NAND business in a deal that’s expected to close next year and further cough up $2 billion for complementary assets including intellectual property and R&D employees in a deal that’s expected to close by 2025. 

Per the agreement between both parties, Intel will continue manufacturing operations at its Dalian Memory Manufacturing Facility, which SK is acquiring, till the final deal is sealed by 2025. The NAND business that Intel is selling off is one that brought in $2.8 billion in revenue and $600 million in operating income in the first half of this year. 

Intel seems to have adopted the strategy of streamlining its business after the appointment of its current CEO Bob Swan, given it’s only last year that the company sold off its smartphone modem business to Apple in a $1 billion deal. In a press statement, Intel said it’ll use the proceeds from its NAND business sale to bolster its long-term growth targets, with the company doubling down on areas such as 5G networking and artificial intelligence for future growth.

“For Intel, this transaction will allow us to further prioritize our investments in differentiated technology where we can play a bigger role in the success of our customers and deliver attractive returns to our stockholders,” Bob Swan said in a press statement.

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