Intel, STMicroelectronics and Francisco Partners
announce flash memory joint venture
1.
Intel-ST deal: What it means /EETimes
2. Intel,
STMicroelectronics and Francisco Partners to establish flash memory
company /DigiTimes
3. Intel, ST form
independent flash company /EDN
4. Intel, ST announce
flash memory joint venture /EETimes
___________________________________________________________________________________________________________
1. Intel-ST deal:
What it means
Mike Clendenin
(05/22/2007 9:19 PM
EDT)
URL: http://www.eetimes.com/showArticle.jhtml?articleID=199701168
SHANGHAI,
China —
STMicroelectronics
seems to have fared
a little better in
the deal that sees
it and Intel Corp.
hook up to create
the largest NOR
flash maker.
Even though Intel
had the larger
business, ST managed
to pocket 8 percent
more than Intel in
stock and cash
compensation,
according to a
research note from
Objective Analysis.
ST's NAND and NOR
revenues added up to
$1.57 billion last
year, while Intel
pulled in about $2
billion in NOR
sales. But Intel
gets a 45.1 percent
equity ownership
stake in the new
company and $432
million.
STMicroelectronics
is due to receive a
48.6 percent equity
stake and $468
million.
"When asked about
this the companies
stressed that this
was a negotiated
deal and that all
parties were pleased
with the results,"
said Jim Handy,
principal analyst at
the market research
firm. "The companies
frequently mentioned
their combined
patent portfolio of
2,500 issued and
1,000 pending
patents. This is
likely to have been
a key factor in
determining this
valuation, which was
stated to be
approximately $3
billion."
There was little
said regarding 300mm
wafer manufacturing,
but ST's shuttered
M6 facility in
Catania is part of
the package and
could be the home
for such an advanced
fab. ST and Intel
indicated that if
the new flash
business begins to
turn a profit in the
first quarter of
2008, then some of
that money could be
funneled into
building 300mm
capacity. "We can
only guess that this
new-found
profitability would
stem from scaling
their products from
90nm to the current
volume 65nm process,
then to 45nm in the
near future," Handy
said.
Since both of
Intel's joint
ventures sell NAND
flash, to avoid
confusion, Intel's
joint venture with
ST will sell NAND
into the cellular
market and other
embedded
applications as part
of a stacked
package, such as
NAND/NOR or
NAND/DRAM, Handy
said. Intel's joint
venture with Micron
— IM Flash — will
sell NAND into the
commodity market.
Here's Handy's
rundown on what the
deal means to the
industry:
Spansion
pulled ahead of
Intel into a leading
position in NOR in
1Q06, a position
that it will have to
yield to the new
firm. Spansion plans
to return to
profitability via
its migration to
45nm and its new SP1
300mm fab which has
already started
processing wafers
and is expected to
ship revenue units
in the second half
of this year. A
300mm fab usually
gives about a 30%
cost reduction over
200mm. So although
Spansion may be
losing its positions
as both the
first-ranked NOR
manufacturer and the
largest pure-play
flash maker, the
company is quite
likely to be the
first NOR maker to
return to
profitability. This
will make it easier
for Spansion to
invest early and
perhaps pull ahead
of the new company.
This will be an
interesting race to
watch.
Samsung
has set a goal of
becoming number one
in NOR revenues by
2009 or 2010. Had ST
and Intel remained
separate entities
this would have been
easier — both
companies were in
the $1.5-2.0B range
in sales last year,
and Spansion had
$2.6B in NOR
revenues. With the
new company already
at a revenue level
of $3.6B, (most of
which was NOR),
Samsung will need to
grow revenues by
another $1B to reach
its first-place
goal.
Hynix is
in an enviable
position, moving
from a single flash
partnership with ST
to now having joint
ventures with ST,
Intel, and SanDisk,
all in the space of
a few months. Hynix
will be managing the
Wuxi China fabs and
other manufacturing
plants in a
relationship that
should give it very
large volumes that
will help the
company take
advantage of
economies of scale.
Intel and ST
will be able to
distance themselves
from the
difficulties posed
by their NOR
businesses in the
past, yet they can
profit from the
larger scale of the
operation and its
narrowed focus. Once
the new company
becomes profitable
these two will have
the option of making
a capital gain on
sales of its stock.
OEMs will
now have no second
source for the
products that Intel
and ST introduced 2
years ago, under
their agreement to
second-source each
others' NOR chips.
This was a strategic
initiative that will
be a casualty of the
deal. Other
companies may use
this to try and
convert Intel/ST
designs to their own
products. The new
company believes
that their synergies
in providing a
complete solution
will outweigh any
disadvantages OEMs
see in the lack of
an alternate source.
|
_____________________________________________________________________________________________________________ |
|
|
2. Intel, STMicroelectronics and
Francisco Partners to establish flash memory company
Press release, May 23; Rodney Chan, DIGITIMES [Wednesday 23 May
2007]
STMicroelectronics, Intel and Francisco Partners have announced
they have entered into a definitive agreement to create a new
independent semiconductor company from the key assets of
businesses which last year generated approximately US$3.6
billion in combined annual revenue. The new company's strategic
focus will be on supplying flash memory solutions for a variety
of consumer and industrial devices, including cellular phones,
MP3 players, digital cameras, computers and other high-tech
equipment.
The new company will combine key research and development,
manufacturing and sales and marketing assets of Intel and
STMicroelectronics into a streamlined worldwide structure with
the scale to produce cost-effective and innovative non-volatile
memory solutions.
With STMicroelectronics and Intel contributing more than 40
years of combined experience in non-volatile memory technology
development, including next-generation phase-change memory, the
company will be well positioned to both serve its customers with
complete memory solutions and accelerate the move to future
non-volatile memory technologies.
"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
ST to redefine its participation in flash memory," said Carlo
Bozotti, STMicroelectronics president and CEO, and non-executive
chairman designate of the new company.
"From the outset, the company will be a leading supplier of
flash memory solutions for wireless communications," said Brian
Harrison, named to become the CEO of the new company at the
close of the transaction and currently vice president and
general manager of Intel's Flash Memory Group. "We will be able
to offer customers complete solutions with NOR- and NAND-based
technologies, which we believe will provide significant
opportunities for growth and the potential to develop products
for many new application areas and geographic regions."
Under the terms of the agreement, STMicroelectronics will sell
its flash memory assets, including its NAND joint venture
interest and other NOR resources, to the new company while Intel
will sell its NOR assets and resources. In exchange, Intel will
receive a 45.1% equity ownership stake and a US$432 million cash
payment at close. STMicroelectronics will receive a 48.6% equity
ownership stake and a US$468 million cash payment at close.
Francisco Partners, a Menlo Park, California-based private
equity firm, will invest US$150 million in cash for convertible
preferred stock representing a 6.3% ownership interest, subject
to adjustment in certain circumstances.
Concurrently, the parties have arranged for the new company to
receive firm commitments for a US$1.3 billion term loan and
US$250 million revolver. The term loan will be underwritten by a
consortium of banks. Proceeds from the term loan will be used
for working capital and payment to Intel and STMicroelectronics
for the purchase price. The transaction is subject to regulatory
approvals and customary closing conditions and is expected to
occur in the second half of 2007.
The new company, to be managed by Brian Harrison as
CEO-designate and Mario Licciardello, currently corporate vice
president of ST's Flash Memories Group as COO-designate, will be
headquartered in Switzerland and incorporated in the Netherlands
with nine main research and manufacturing locations around the
world and approximately 8,000 employees. The company will also
benefit from a worldwide sales force.
_____________________________________________________________________________________________________________ |
3. Intel, ST form
independent flash company
By Suzanne Deffree, News Editor -- EDN/
Electronic News, 5/22/2007
Semiconductor industry giants Intel and STMicroelectronics, along with
investment firm Francisco Partners, today announced plans for a new
independent flash company that will see key assets from the companies
combined for a memory powerhouse expected to compete more effectively
Spansion’s and Samsung’s memory operations.
Under the terms of the agreement, ST will sell its flash memory assets,
including its NAND joint venture interest and other NOR resources, to
the new company while Intel will sell its NOR assets and resources. In
exchange, Intel will receive a 45.1 percent equity ownership stake and a
$432 million cash payment at close. ST will receive a 48.6 percent
equity ownership stake and a $468 million cash payment at close.
Assets and resources from both companies include a patent portfolio of
some 2,500 patents and 1,000 patents pending, giving the new company
significant scale.
“The formation of the new company is likely to help STMicro and Intel
curtail costs in the loss-making NOR business and help compete more
effectively with Spansion and Samsung,” Tim Luke, an analysts with the
Lehman Brothers, said in a research note this morning. “This may result
in a more rational pricing and competitive environment, which we believe
is good for the competition, namely Spansion, as well as the new
company.”
Luke estimated that the new company will have roughly 37 percent NOR
market share, followed by Spansion with 33 percent and Samsung with 11
percent. From a NAND perspective, Luke said the new company will remain
a small player, as Intel's NAND business will remain in the joint
venture (JV) established with Micron, IM Flash Technologies.
Meanwhile, Francisco Partners, 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, subject to adjustment in
certain circumstances. Concurrently, the parties have arranged for the
new company to receive firm commitments for a $1.3 billion term loan and
$250 million revolver. Proceeds from the term loan will be used for
working capital and payment to Intel and STMicroelectronics for the
purchase price, the three companies said in their statement.
The yet-to-be-named company will be managed by Brian Harrison as
CEO-designate, currently Intel’s VP and general manager of Intel’s flash
memory group, and Mario Licciardello, currently corporate VP of ST’s
flash memories group as COO-designate. The company will be headquartered
in Switzerland and incorporated in the Netherlands with nine main
research and manufacturing locations around the world and approximately
8,000 employees.
“From the outset, the company will be a leading supplier of flash memory
solutions for wireless communications,” Harrison said in the statement.
“We will be able to offer customers complete solutions with NOR- and
NAND-based technologies, which we believe will provide significant
opportunities for growth and the potential to develop products for many
new application areas and geographic regions.”
_____________________________________________________________________________________________________________
4. Intel, ST announce flash memory joint
venture
|
Peter
Clarke
(05/22/2007 9:13 AM EDT)
URL:
http://www.eetimes.com/showArticle.jhtml?articleID=199700828
|
| |
|
LONDON — An expected move by STMicroelectronics NV and Intel
Corp. to create a flash memory joint venture has been
announced with an assist from private equity firm Francisco
Partners LP(Menlo Park, Calif.).
The move is due to see 8,000 employees move to a new, but
as yet unnamed, Swiss-headquartered joint-venture in NOR and
NAND flash memory that will also encompass developments in
chalcogenide phase-change memory.
For Intel (Santa Clara, Calif.) and STMicroelectronics
(Geneva, Switzerland) flash memory mainly includes the NOR
variety of nonvolatile memory, often used for program
storage in mobile equipment. Intel has a NAND flash memory
joint-venture with Micron Technology Inc. (Boise, Idaho)
called IM Flash Technologies Inc.
The new company would combine R&D, manufacturing and
marketing assets drawn from Intel and STMicroelectronics
businesses which last year generated approximately $3.6
billion in combined annual revenue.
Under the terms of the agreement STMicroelectronics will
sell its flash memory assets, including its share in a
Chinese joint-venture with Hynix Semiconductor Inc. and
other NOR resources, to the new company while Intel will
sell its NOR assets and resources.
In return Intel gets a 45.1 percent equity ownership
stake and a $432 million cash payment at close.
STMicroelectronics is due to receive a 48.6 percent equity
ownership stake and a $468 million cash payment at close. At
the same time Francisco Partners will invest $150 million in
cash for convertible preferred stock representing a 6.3
percent ownership interest, subject to adjustment in certain
circumstances.
"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 ST to redefine its participation in flash memory,"
said Carlo Bozotti, STMicroelectronics' president and CEO,
and non-executive chairman designate of the new company, in
a statement.
"The new memory company will have the people, scale and
technology leadership to meet the needs of customers
requiring leading-edge products in this highly competitive
marketplace," said Paul Otellini, Intel president and CEO,
in the same statement.
"From the outset, the company will be a leading supplier
of flash memory solutions for wireless communications," said
Brian Harrison, named to become the CEO of the new company
at the close of the transaction and currently vice president
and general manager of Intel's Flash Memory Group.
"We will be able to offer customers complete solutions
with NOR- and NAND-based technologies, which we believe will
provide significant opportunities for growth and the
potential to develop products for many new application areas
and geographic regions." The transaction is subject to
regulatory approvals and customary closing conditions and is
expected to occur in the second half of 2007.
The new company, to be managed by Brian Harrison as
CEO-designate and Mario Licciardello, currently corporate
vice president of ST's Flash Memories Group as
COO-designate, will be headquartered in Switzerland and
incorporated in the Netherlands with nine main research and
manufacturing locations around the world and approximately
8,000 employees.
The integration of STMicroelectronics' and Intel's
parallel research programs on phase-change memory is also
expected to bring the benefits of advanced flash memory
technology to potential customers more quickly and
efficiently. |
|
