Flash!
Announced today was a joint-venture spin-off the combines the two of the largest players in flash memory. Intel and Swiss-based STMicroelectronics NV will create a new company, which will specialized in the kind of memory increasingly used in cell phones, PDAs, MP3 players, cameras, and other electronic devices. The new company, with roughly equal ownership by the joint-venture partners, will have revenues of over $3 billion.
The new company combined the #2 and #3 players in so-called NOR chips, used especially in cell phones. Together they control 40% of that specialized market. #1 in that area is US-based Spansion Inc., spun off in 2005 from Intel arch-rival Advanced Micro Devices and Fujitsu. The deal allows Intel and STMicro to combine operations, consolidate manufacturing, and lower costs. On the other, South Korean electronics giant Samsung is poised to enter the NOR market, with its more heavy-duty manufacturing infrastructure.
In the faster-growing area of so-called NAND chips the new company will have a smaller position. STMicro has a joint operation with South Korea's Hynix. That operation may compete against IM Flash Technologies, which is an existing joint venture between Intel and US-based Micron Technology. Samsung is a leader in NAND.
NOR technology is at war with NAND in the storage industry. NAND holds more memory, but NOR is generally considered more reliable.
The purpose is to lessen competition in a cutthroat market. Joint ventures and spin-offs in commodity markets allow for technological competitiveness and a chance to maintain margins. And the top chipmakers are battling it out on every front across the world, whiel also making new alliances.
9:58:57 PM 
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