Intel, ST Micro set up new flash outfit

CHIPZILLA has inked a deal with ST Microelectronics and Francisco Partners to create a new semiconductor company named Numonyx that will design, develop and manufacture NOR and NAND flash memory products. The companies began negotiations back in July 2007.

Approximately 2,500 Intel staff are to join the new outfit as the chip behemoth transfers its NOR flash memory business to Numonyx, which will be based in Switzerland, in exchange for 45.1 per cent ownership.

ST Micro will have 48.6 per cent of the new company, while private equity firm Francisco Partners gets 6.3 percent in exchange for $150 million.

Numonyx will receive $450 million of debt financing and a $100 million credit facility. The loan has a four year term and Intel and STMicroelectronics have each provided Numonyx and the banks with a guarantee of 50 per cent of the indebtedness.

Intel estimates that in the first quarter of 2008, it will record additional costs of approximately $300 million related to the assets transferred to Numonyx. µ

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