Why does SK Hynix want to sell its chip facility in southwest China?

The South Korean chipmaker wants to pivot towards the high-margin AI memory sector, but analysts warn any sale would face valuation hurdles South Korean chipmaker SK Hynix’s potential deal to offload a packaging plant in southwest China is part of a strategic pivot towards higher-margin artificial intelligence (AI) memory products, according to analysts. But a sale might not be straightforward, as the memory chip giant would need to navigate valuation hurdles and a volatile chip cycle, they cautioned. SK Hynix said on Monday it was “looking into various solutions to enhance the competitiveness of its packaging business”, after reports emerged last week it was weighing options for its facility in the megacity of Chongqing. Those options include bringing in an investor for a stake sale that could value the plant at around US$3 billion, Bloomberg reported. SK Hynix said in a statement that no final decisions had been made. The Chongqing plant functions as a back-end hub focused on downstream packaging and testing for SK Hynix’s NAND flash memory products.

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