Chip vendors spin off divisions into new firm
Vendors join forces to create independent semiconductor firm
Intel and STMicroelectronics are spinning off their respective Flash memory businesses to create an independent semiconductor company.
The new company, which has yet to be named, will combine research and development, manufacturing and sales and marketing assets of both Intel and STMicroelectronics.
Brian Harrison, currently vice-president and general manager of Intel’s Flash Memory Group, has been named as chief executive of the new company.
Carlo Bozotti, president of STMicroelectronics, said in a statement: “The firm will be positioned to service customers with everything necessary to deliver non-volatile memory technologies.”
Research firm iSuppli listed the combined market shares of Intel and STMicroelectronics at 37 per cent, which would place the new firm at the head of the market.
Mark DeVoss, senior analyst at iSuppli, forecast that the new business will be successful as it combines the strengths of both companies.
“Intel seems to have a history of incubating memory technologies and then setting them by the wayside, because Intel is not really a memory company,” he said.
DeVoss said that making chips in a Nor market with shrinking profits was becoming too costly.
“No one has made any money in the Nor Flash business since 2004,” he said.
DeVoss said that the merging of the US-based Intel and the Swiss-based STMicroelectronics into a new company will have to take place quickly.
“Executives will have to convince their customers that this is going to be a seamless, non-disruptive event and that is going to be a challenge,” DeVoss added.
Additional reporting by Shaun Nichols.