Feeds

Intel frees Flash biz

Goes Swiss with STMicroelectronics

High performance access to file storage

Intel has followed AMD's lead by creating a separate flash memory business with a partner.

Intel and STMicroelectronics have signed an agreement to create an independent flash memory company based in Geneva. The new venture could have annual revenue of up to $3.6bn and will create products for mobile devices such as MP3 players and digital cameras. Rival AMD made a similar move in 2005 with the IPO (initial public offering) of Spansion - previously a joint venture with Fujitsu.

The move to create a separate flash business follows years of struggles at Intel to turn consistent memory profits.

"Previously, our objective was for the flash business to become profitable or to look for an alternative," said Intel spokesman Tom Beermann. "We haven't achieved that goal of profitability, and this is seen as the best path to follow."

STMicroelectronics will ship its flash assets, including NAND and NOR technology, to the new company, while Intel will ship its NOR assets. Intel will take a 45.1 per cent stake in the venture, while STMicroelectronics will take 48.6 per cent. Francisco Partners, a Silicon Valley-based private equity group, will invest $150m for a 6.3 per cent stake.

The three parties expect the new venture to start in the second half of this year, as long it meets regulatory approvals.

Close to 4,000 Intel workers would join the venture, which will employ 8,000 people.

In its most recent quarter, Intel reported flash memory revenue of $469m and a net loss of $283m from the unit. Intel lost $638m from the flash memory business during fiscal 2006 on revenue of $2.2bn.

AMD formed Spansion, in part, to offset pricing pressure from Intel. Some analysts saw Intel pricing its flash products very aggressively to undercut AMD's memory and processor gains.

Unable to beat up on AMD directly, Intel now appears willing to bet on the partnering approach with memory. The combined Intel/STMicroelectronics business would have more volume and sales muscle than Intel on its own.

Intel will still sell NAND memory through IM Flash - a joint venture with Micron.

Intel famously quit the memory business in 1985 due to increasing pressure from Asian suppliers and decided to concentrate on selling processors. That difficult move has been hailed as one of the greatest business decisions - made by Andy Grove and Gordon Moore - of all time. ®

High performance access to file storage

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Nokia offers 'voluntary retirement' to 6,000+ Indian employees
India's 'predictability and stability' cited as mobe-maker's tax payment deadline nears
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
France bans managers from contacting workers outside business hours
«Email? Mais non ... il est plus tard que six heures du soir!»
Adrian Mole author Sue Townsend dies at 68
RIP Blighty's best-selling author of the 1980s
Analysts: Bright future for smartphones, tablets, wearables
There's plenty of good money to be made if you stay out of the PC market
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.