Intel, STMicro combine on flash memory venture

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Venerable silicon houses Intel and STMicroelectronics, working in conjunction with equity dealer Francisco Partners, are pooling elements of their flash memory businesses to create a new Swiss-based memory maker. The new company has yet to be formally named, but is expected to trade under its new banner and stand-alone management sometime during calendar 2007. Substantially all of Intel's aging NOR flash RAM business will go to the new company, while STMicro is seen as essentially exiting the flash market, contributing both its NOR and NAND interests.

STMicro will hold the lion's share of the new company, with Francisco's $150 cash stake netting it roughly 6 percent of the new outfit. The company is expected to borrow heavily in order to pay its parent chip fabricators cash for their assets, with the reported payout nearly US$1 billion. The joint venture will start with an estimated revenue stream of approximately US$3.6 billion and go toe-to-toe with market leaders such as Spansion, itself a combined effort of AMD and Fujitsu.

The daily operations of the new company will be handled by an executive management team appointed by Intel, STMicroelectronics and Francisco Partners. Brian Harrison, VP/GM at the Intel Flash Memory Group will be the new company's CEO, with ST Flash Memories Group VP Mario Licciardello slated to be the venture's COO.

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