U.S. chip maker Applied Materials is set to buy Japan’s Kokusai Electric for $2.2 billion in cash from investment firm KKR & Co.
Memory chip market is expected to rebound as data center customers ramp up operations, coupled with higher demand for chips used in artificial intelligence-based devices and 5G phones.
The deal comes less than two years after KKR took control of Hitachi Kokusai in a $2.2 billion deal. The Financial Times had reported in February that the private equity firm was in talks with two Chinese buyers for the sale of the company.
Kokusai, which counts Samsung, SK Hynix, Toshiba and Micron among its top customers, reported revenue of $1.24 billion as of March 2018.
“AMAT needs to acquire a $1B+ revenue business to make a difference to its revenue and earnings, so this makes sense,” Cowen and Co analysts wrote in a client note.
The deal would push the U.S. company’s share of the chipmaking equipment market to above 20 percent from 18 percent, Nikkei reported.
Applied Materials last month forecast third-quarter profit and revenue above estimates after reporting better-than-expected quarterly results.