|
Intel & STMicroelectronics announce flash memory spin-off |
|
|
|
May 22, 2007 at 03:46 PM |
 The long anticipated move by Intel and STMicroelectronics to exit the flash memory market has been made official. Both companies will combine research and development, manufacturing and sales and marketing assets into a new entity with Francisco Partners, a private equity firm taking a 6.3 percent ownership interest.
"The new company will be positioned to service customers with all of the elements necessary to deliver current and next-generation non-volatile memory technologies, while allowing ST to redefine its participation in flash memory," said Carlo Bozotti, STMicroelectronics president and CEO, and non-executive chairman designate of the new company.
"The new memory company will have the people, scale and technology leadership to meet the needs of customers requiring leading-edge products in this highly competitive marketplace," said Paul Otellini, Intel president and CEO.
The new agreement means that STMicroelectronics will sell its flash memory assets, including its NAND joint venture interest and other NOR resources, to the new company while Intel will sell its NOR assets and resources. In exchange, Intel will receive a 45.1 percent equity ownership stake and a $432 million cash payment while STMicroelectronics will receive a 48.6 percent equity ownership stake and a $468 million cash payment.
"From the outset, the company will be a leading supplier of flash memory solutions for wireless communications," said Brian Harrison, named to become the CEO of the new company at the close of the transaction and currently vice president and general manager of Intel's Flash Memory Group. "We will be able to offer customers complete solutions with NOR- and NAND-based technologies, which we believe will provide significant opportunities for growth and the potential to develop products for many new application areas and geographic regions."
The new flash memory business will also take over the development of both Intel's and STMicroelectronics' research into phase change memory.
The new company will also receive a $1.3 billion term loan and $250 million revolver from the previous owners and will be headquartered in Switzerland and incorporated in the Netherlands. The company will have nine main research and manufacturing locations around the world and approximately 8,000 employees.
|
News 
