Intel and STMicro to form NOR flash memory joint venture

Over the past year, Intel and STMicro said it would have been out of the NOR market. Intel wants is committed to operating its core microprocessor business PC and enterprise servers, STMicro do not want to drag by the NOR business losses.
market has long been rumors that Intel and STMicro will work together. Sides of the transaction agreement, STMicro will own assets of NOR and NAND flash memory sold the new company, Intel NOR assets and resources will be transferred to the company.
Campo had been forecast to Intel and STMicro NOR flash will merge their operations. Last week, he pointed out that such a transaction “may lead to their customers in some confusion and some degree of anxiety.”
Menlo Park, Calif.-based private equity firm Francisco Partners will invest in the new company $ 150 million in cash, in exchange for 6.3% of the shares of the company. To give the new company to provide more development funds, the three parties have already worth $ 1.3 billion term loan and $ 250 million of revolving loans can make the arrangements.
Campo forecast, Intel and STMicro joint flash memory prices may help, “a joint company pricing strategy will be more cautious.”
The transaction may be the world largest manufacturer of NOR Flash Spansion (SPSN) benefit. Like Intel and STMicro, Spansion also encountered in the NOR market is difficult to profit making.
Swiss-based STMicro will receive a 48.6% ownership of the new company and $ 468 million in cash. Headquartered in Santa Clara, Calif. Intel will get 45.1% stake in the new company and received at closing $ 432 million in cash.
This is currently named company will have 8,000 employees, will be headquartered in Switzerland. Currently vice president of Intel Flash Memory Group, Brian – Harrison (Brian Harrison) will serve as the new company CEO, and STMicro Flash Memory Group, Vice President Mario – Lise de (Mario Licciardello) will serve as chief operating officer.
global NOR market – the market in 2006 total sales of $ 8.5 billion – is facing oversupply and weak prices issue. NOR flash is a kind of electronic products to help consumers in case the power is turned off to save the data of the semiconductor. Mobile phone manufacturers is the largest NOR Flash provider customers, such products are also used for TV set-top boxes and automotive products.
Intel and STMicro electronics manufacturers are some of the Flash memory products provider, they form a new company means that the supply relationship will cease to exist, which may cause Spansion to get new business. After the news of these transactions, Spansion stock price increased.
Intel and STMicro announced last year, the NOR flash memory revenue totaled $ 3.6 billion, the two companies in the global NOR market share and 40%. However, the two companies NOR businesses are not profitable, the market downturn has been going on for a long period of time.
(San Francisco on the 22nd News) On Tuesday, Intel (INTC) and STMicroelectronics, Inc. (STMicro) (STM) announced plans to set up a new flash memory joint venture, the new company will become the world top mobile phones and other wireless NOR flash memory chip equipment supplier.
This newly formed company will operate four semiconductor current ownership of all of Intel and STMicro factories that are located in Italy, Israel, China and Singapore.
Spansion CEO Tony Cui – Campo (Bertrand Cambou) said in an interview last week, if Intel and STMicro deal, “We will do our best to derive maximum benefits.”