Intel, ST flash joint venture Numonyx officially launches

By Suzanne Deffree, Managing Editor, News -- 3/31/2008

Numonyx BV has officially launched, merging the respective NOR and NAND flash businesses of Intel Corp  and STMicroelectronics.

On the strength of its parent companies, Switzerland-based Numonyx comes out of the gate today as the third largest non-volatile memory provider with combined annual revenue of approximately $3 billion, according to data from In-Stat.

In exchange for Intel NOR flash memory business assets and certain assets related to the company's phase change memory (PCM) initiatives, the company holds 45.1% ownership in Numonyx. ST transferred its NAND business and acquired a 48.6% ownership interest in Numonyx. Tech-focused equity firm Francisco Partners acquired a 6.3% ownership interest in exchange for a cash investment of $150 million.

“The complementary nature of the two parent companies’ products, technologies, and expertise has given us a competitive edge,” Brian Harrison, CEO of Numonyx and formerly VP and general manager of Intel’s flash memory group, said in a statement. “We start with a comprehensive product line-up of leading technologies; dedicated capacity; already leading PCM development and delivery; a highly experienced management team and an amazing employee base of memory experts. Immediately, Numonyx is a formidable memory solutions provider.”

True, Numonyx launches today in a strong market position; however, as Q1 2008 wraps up, the memory market itself is an inarguably harsh one. In the quarter, Gartner nearly halved its 2008 semiconductor market growth estimate to 3.4%, pointing to NAND as a key factor. NAND, according to the market research company, will see market growth of less than 15% in 2008, compared with close to 30% the previous quarter. Also in the quarter, iSuppli slashed its forecast for 2008 NAND memory market revenue growth from 27% to the single-digit percentage range on reports that Apple Inc has issued order reductions for the flash memory. Intel’s Q1 gross margin is also expected to reflect pressure on the NAND memory market, as the top MPU maker announced earlier this month that it had reduced its gross margin estimate "due to lower than expected prices for NAND flash memory chips."

The new company will focus on NOR, NAND, and RAM memory technologies, as well PCM, and with 40 years of combined experience from Intel and ST, Numonyx is receiving a substantial patent portfolio cover a variety of technologies including graphics, cell phones, storage media, processors, semiconductor manufacturing and packaging, and various consumer devices. 

Numonyx is expected to continue Intel and ST’s joint work on PCM, for which they delivered functional prototype samples in February. Codenamed “Alverstone,” the 128-Mb, 90-nm device uses PCM to provide “very fast read and write speeds at lower power than conventional flash, and allows for bit alterability normally seen in RAM,” according to Intel and ST.

Numonyx is currently producing high volume 65-nm NOR memory chips and plans to move to 45 nm before the end of the year. Numonyx possess both wafer fabrication and assembly and test manufacturing facilities -- including six 200-mm and three 300-mm wafer fabs -- and also holds external supply agreements.

Harrison is joined at Numonyx by COO Mario Licciardello, formerly corporate VP and general manager of ST’s flash memories group. Numonyx has approximately 7,000 employees worldwide and facilities in the US, Italy, China, Israel, Singapore, Malaysia, and the Philippines.

Numonyx’s commencement comes after first announcement of plans for the joint venture from Intel and ST in May 2007, the company’s naming in July, and a delay in its launch in December.

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