Intel and STMicroelectronics have finalised and closed a transaction to create a new independent semiconductor company called Numonyx.
The new company will design, develop and manufacture NOR, NAND and RAM flash memory products. STMicroelectronics as an individual entity will essentially leave the flash market.
Intel will move its aging NOR flash ram business to the new business, making Numonyx the leading provider of NOR flash memory with a predicted revenue of $3 billion (1.5 billion).
Numonyx said it will serve as a dedicated memory specialist who will serve customers making devices such as mobile phone and ultra-mobile computers.
"It is rare when a company starts in such a strong position," said Brian Harrison, chief executive of Numonyx. "The complimentary nature of the two parent companies' products, technologies and expertise has given us a competitive edge."
The transaction will involve Intel acquiring 45.1 per cent of Numonyx while ST Microelectronics will take 48.6 per cent. Francisco Partners will acquire 6.3 per cent ownership in return for an investment of $150 million (75 billion).
Numonyx is taking a loan of $450 million (225 million) for financing, but the deal will also affect Intel's and STMicroelectronics profits for the first quarter of 2008. Intel will move 2,500 employees to the new company.
Earlier this month, Intel and STMicroelectronics had announced functional prototypes of a memory device codenamed 'Alverstone' which introduced Phase Change Memory (PCM) to customers.
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