South Korean chipmaker SK Hynix’s potential deal to offload a packaging plant in southwest China is part of a strategic pivot towards higher-margin artificial intelligence (AI) memory products, according to analysts. But a sale might not be straightforward, as the memory chip giant would need to navigate valuation hurdles and a volatile chip cycle, they cautioned. The Chongqing plant functions as a back-end hub focused on downstream packaging and testing for SK Hynix’s NAND flash memory products. The company also operates two front-end wafer fabrication plants for dynamic random access memory (DRAM) and NAND products in China – in the eastern city of Wuxi and northeastern Dalian, respectively. Zhang Guobin, founder of Chinese semiconductor news platform eetrend.com, described SK Hynix’s decision as a strategic shift from low-value back-end assembly to high-margin front-end manufacturing.