Intel Corp. late today announced a dea to sell its NAND flash memory business to South Korean firm SK Hynix Inc. for about $9 billion.

The sale also includes Intel’s Solid State Drive business and its NAND flash factory in Dalian, China, but not the 3D Xpoint-based Intel Optane memory modules that make up the rest of Intel’s Non-Volatile Solutions Group. Hynix said it will pay Intel $7 billion before the end of the year and pay the rest by March 2025.

The move is a significant step away from memory chips, a market that many years ago Intel started with before famously pivoting to microprocessors.

The Non-Volatile Solutions Group posted record revenue of $1.7 billion in the company’s most recent financial quarter, up 76% from a year before. But the business has proved to be troublesome for Intel too. Last year it posted a loss, though things have improved in 2020 with a $300 million operating profit recorded in the second quarter.

Still, that apparently isn’t enough for Intel. The company has reportedly been looking for a way to exit the NAND flash business for some time because the return on investment hasn’t met its expectations, the Journal said. During a Morgan Stanley Analyst Conference in March, Intel Chief Financial Officer George Davis said the NAND memory business was not at the level the company would like to see, CRN reported.

“NAND in the data center is just becoming a more and more important element, but we haven‘t been able to generate the profits out of that to get the returns we would like to see,” he was quoted as saying.

Davis said at the time Intel was considering entering into some partnerships to boost profitability, which would mean outsourcing some NAND manufacturing to third parties. And in April, Intel Chief Executive Bob Swan said the company was evaluating ways to bring down costs.

Hynix’s bid to acquire the NAND flash business may have been on the cards for some time. Blocks & Files noted that Chinese media had reported as early as July 2019 that it was in talks to acquire Intel’s Dalian factory.

Analyst Charles King of Pund-IT Inc. said the sale is not a surprise, noting that Swan mentioned the problems Intel was having in making NAND flash profitable as far back as 2019.

“Say what you will about Intel, but the company has seldom been shy about admitting its mistakes and moving on,” King said. “Doing so with an extra $10 billion in its pocket is hardly a worst-case scenario.”

Holger Mueller, an analyst with Constellation Research Inc., said it’s not entirely clear how the strategic changes Intel is making are progressing. “The key thing is for the current board and leadership to describe the go forward strategy for Intel, so customers know what to expect and investors know what to invest in,” he said.

In any case, the sale of the memory chip business has been well-timed, said another analyst, Patrick Moorhead of Moor Insights & Strategy. He told SiliconANGLE that the NAND business had become extremely commoditized, and that for it to be profitable, Intel would need to “go big” and spend tens of billions of dollars on manufacturing.

“I think Intel is better off focusing on compute, networking and Optane, which helps its compute strategy,” Moorhead said.

Intel’s stock is up more than 2% since the reports emerged.

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