Intel and ST Micro Joint Venture to Form a New Flash Company
Intel, ST Micro and Francisco Partners joint venture on new flash memory company was announced recently. This move by Intel was expected by analyst earlier due to huge loss on its NOR flash memory division.
Under the terms of contract, Intel will contribute its NOR flash memory division whereas ST Micro will contribute its flash memory assets, including its share with Hynix Semiconductor. Besides, Francisco Partners (a private equity group located in California) will invest additional USD150 million cash, to be a stakeholder with 6.3% share owner.
In return, Intel will be able reclaim USD432 million and ST Micro will get USD468 million. ST Micro will be the major stakeholder owning 48.6 percent exceeding Intel at 45.1 percent of the new company.
Immediate after the announcement, Intel share was up 29 cents to USD22.92 and ST Micro was up 85 cents to USD20.73. Surprisingly, Spansion, a strong Intel competitor in flash memory, was up USD1.22 to USD11.66.
The new company (yet to be named) will expect to compete with Spansion, Samsung and Toshiba for the development of NOR, NAND memory flash as well as nascent phase-change memory device.
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