Intel has teamed with French-Italian semiconductor maker STMicroelectronics to form a new flash memory company in Switzerland to create memory for consumer and industrial devices. As part of the deal, Intel will sell all of its NOR flash resources to the newly formed company while STMicro will contribute its NAND (define) and NOR (define) flash assets.
"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 STMicro to redefine its participation in flash memory," said Carlo Bozotti, STMicro president and CEO, in a statement Tuesday.
NOR-based flash is considered slower but has better read/write capabilities than NAND and is used for executing applications in place, rather than loading them into main memory. NAND is faster and more popular as a means of data storage.
Under the terms of the agreement, Intel (Quote) will receive a 45.1 percent equity ownership stake and a $432 million cash payment at close of the deal for its flash assets, while STMicroelectronics will receive a 48.6 percent equity ownership stake and a $468 million cash payment at close.
Francisco Partners L.P., a Menlo Park, Calif.-based private equity firm, will invest $150 million in cash for convertible preferred stock representing a 6.3 percent ownership interest. The two companies estimate that between the two of them, flash products brought in $3.6 billion in sales last year.
The new, as-yet unnamed company will be set up quite nicely, with a $1.3 billion term loan and $250 million line of revolving credit. The transaction is subject to regulatory approvals and customary closing conditions and is expected to occur in the second half of 2007.
In other Intel news, the company found a new way to go green. In addition to its ongoing efforts to cut power consumption, Intel announced it plans to make its entire line of 45nm "Penryn" processors entirely lead-free when manufacturing begins in the second half of the year.
The processor chip doesn't have any lead in it, but the motherboards do. The company will replace lead used in motherboard attachments with an alloy made of tin, silver and copper. The company will make its 65nm chipsets lead free beginning next year as well. Intel said there will be no impact on performance or reliability by the metal switch.
The disposal of old computers has become an increasing problem as more computers have gone into the marketplace, more have eventually ended up in landfills, and chemicals used in building the computers are found to be toxic.
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