SK hynix has signed a contract with Magnus Semiconductor PEF to acquire the 100% full ownership of foundry contract chip maker Key Foundry for 575.8 billion won in cash

The acquisition comes 5 months after SK hynix CEO Park Jung Ho announced that the chip maker would doble its 8-ich-based foundry chip-making capacity   

Key Foundry is a spin off of Magnachip Semiconductor, which was split off from former Hynix Semiconductor, a predecessor of SK Hynix.

Private equity fund Magnus Semiconductor PEF bought out the foundry spinoff from Magnachip in 2020.

The foundry chip maker is operating 8-inch wafer fab lines in Cheongju, Korea at a monthly capacity of 90,000 wafers, mainly producing power management or PM ICs, display driver ICs, and microcontrollers.

The acquisition will greatly help SK hynix to beef up its foundry contract chip making business in terms of capacity. The chip maker’s subsidiary SK Hynix System IC is now running 8-inch wafer at an annual capacity of roughly 9 million wafers.

Once approved by anti-trust bodies in major countries like U.S. and EU, the deal will give SK hynix much-needed economies of scale to operate its foundry business more efficiently.