SK Hynix to sell 50% stake in China foundry unit to Chinese enterprise

South Korea's SK Hynix has agreed to sell its nearly 50% stake in its foundry unit based in China to a Chinese state-owned enterprise, according to regulatory filings and media reports.

SK Hynix System IC said in a regulatory filing that it plans to sell a 21.3% stake in its foundry unit in Wuxi to China's state-owned Wuxi Industry Development Group Company for 205.4 billion won ($150.81 million).

In a separate filing, SK Hynix System IC said it will also sell its intangible assets, including process technology to its Wuxi unit for 123.8 billion won.

In both filings, SK Hynix said they are pursuing such sales to its improve business structure and seek mid-to-long-term growth opportunities.

Wuxi Industry Development Group Company will also acquire a further 28.6% through a new share issuance, Korea Economic Daily newspaper reported on Wednesday, citing an unnamed source.

"We agreed in July 2018 with the Wuxi Industrial Development Group Company that we will proceed with this move when we establish a joint venture to facilitate the construction of a fab," SK Hynix said in a statement.

SK Hynix did not elaborate further on the size of the deal.

The chip contract manufacturing unit in Wuxi was established in 2018.

The Chinese state-owned Wuxi Industry Development Group Company has 33 wholly-owned and holding enterprises and public institutions, and 30 shareholding enterprises, its website said.

Its main businesses include advanced manufacturing, microelectronics, new energy, new materials, environmental protection and modern services, according to the website. (Reuters)