SK Hynix mulls full control of Key Foundry

[Photo provided by SK hynix]

South Korea’s SK hynix is considering the acquisition of the remaining shares in Key Foundry, a dedicated to 8-inch wafer foundry house in Korea, to beef up its non-memory capacity.

According to industry sources on Monday, the world’s second largest memory chipmaker has expressed its intension to buy the remaining 50.2 percent of the 8-inch wafer foundry house to its seller after appointing financial and legal advisory firms.

An SK hynix official said the company is looking into different ways of expanding its foundry business, but nothing has been determined.

Earlier, Park Jung-ho, Vice Chairman of SK hynix, said the company will consider various ways to double its foundry capacity, including mergers, acquisitions and expansion of existing facilities. The company’s non-memory business accounts for 2 percent of total revenue.

Key Foundry is a spinoff of the foundry division of Magnachip, which itself was spun off from Hynix Semiconductor, the predecessor of SK hynix, in 2004 after being sold to Citigroup’s venture capital arm.

Key Foundry was spun off from Magnachip last year after the foundry was sold to Magnus PEF, which was jointly launched by the Korean Federation of Community Credit Cooperatives and SK hynix. SK hynix invested about 200 billion won ($177 million) into the fund to acquire the 49.8 percent stake in Key Foundry.

Foundries like Key Foundry and Taiwan’s UMC now operate at full capacity to respond to the current shortage in automobile chips usually manufactured on 8-inch wafers.

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