Cypress and SK Hynix set up a joint venture
Cypress Semiconductor and SK Hynix announced the creation of a joint venture, which will release and sell the current generation of SLC NAND flash memory Cypress, as well as the development of future products. The result of the creation of the joint venture will be the departure of Cypress from the production and sale of NAND-memory and the ability to concentrate on more profitable activities. In turn, SK Hynix will be able to use outdated production facilities, as well as loyal customers.
According to the terms of the joint venture agreement, SK Hynix will invest $3.6 million in cash and receive 60% of the enterprise, while Cypress will invest $2.4 million (as well as certain equipment) and acquire a share of 40 %. In addition, Cypress will also give to the joint venture up to 15 employees, provide transit manufacturing and development services to the joint venture, and facilitate the transition of existing Cypress customers to the joint venture. At the same time, by the end of January 2021, the companies will divide the profit from the activities of the joint venture by 50 to 50. The term of the current contract is five years. Upon their expiration, the terms of participation of the parties may be revised, or SK Hynix will buy back the share of Cypress. While SK Hynix is the right to purchase an additional share of 10% in the case that its deliveries will exceed 15 000 plates with memory in a month.
Cypress got the business of manufacturing and selling specialized NAND and NOR flash memory when buying Spansion in 2015. At the end of 2016, Cypress transferred the production of SLC (single-bit) NAND flash memory chips with a capacity of 1-16 Gbit to SK Hynix on a take-or-pay basis of 15,000 memory plates per quarter. The joint venture will formally start work in the first quarter of 2019, which will invalidate the outsourcing agreement.
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