Intel, ST Micro given leave to start new flash joint venture

A CUNNING PLAN hatched by Intel and STMicroelectronics to start a flash memory firm as been given the thumbs-up by Eurocrats at the European Commission.

The pair want to start a new company and, ever so cleverly, they want to call it Newco according to the Dow Jones wire [Prop. Rupert Murdoch, Ed.].*

The Commission decided that there was enough competition in the flash memory market for it not to get steamrollered by the likes of Intel which, having a virtual monopoly in X86 processors, can print money and steamroller most, should it feel like it.

Intel and STMicro will sell themselves their own existing Flash businesses. It seems they'll each put a few million into the new company so that it can pay them for these businesses. Then they'll set up Newco in Switzerland, where a few high-powered execs can swan about making decisions about where's cheapest to build floggable flash.

They'd be bonkers to have a factory in Switzerland, where people expect proper wages, so they'll amble off to some third-world spot and build factories there, employing poorer people on cheap wages. The firm will employ around 8,000 workers once it's up and running, apparently.

Intel will take a 45.1 per cent share in Newco and STMicroelectronics will take 48.6 per cent of the new, um, co.. Venture capitalists at Francisco Partners will take the rest in exchange for $150 million in cash.

Earlier this year broadcaster NBC was in talks with Murdoch's gang at News Corp about forming a Youtube-alike with the name NewCo.

Funny how such a crap name can suddenly become popular. µ

* Intel said the company will be called Numonyx and not Newco, after all. Meanwhile the Wall Street Journal has called Intel's new server microprocessors "Zeons". Next thing there will be naked women on page three of the August rag.