Intel's Memory Joint-Venture, to Be Approved Next Week

Numonyx, Intel's flash-memory joint-venture with semiconductor expert ST Microelectronics is set to be approved early next week. According to the two companies, the flash memory venture will be funded in collaboration with investment company Francisco Partners LP.

The official joint announcement is scheduled for March 31st, when the two companies are set to give further details about the total investment, manpower, research and development or manufacturing plans. According to a spokesperson for the venture, the announcement will be published immediately after the agreement has been signed.

Despite the fact that the initial deadline for closing the deal was set for January 1st 2008, the joint venture could not solve its financial issues on time. The three companies involved with the flash memory joint venture announced a press conference in February, but it was canceled without further explanations, which led to a series of speculations regarding the precarious financial state of the joint business.

The flash-memory joint venture stipulates that the new company will receive firm commitments for a $1.3 billion term loan and $250 million revolver. However, the terms and conditions have been revised in the following months, and shifted to a senior loan of up to $650 million, and a $100 million committed revolving credit facility for Numonyx. According to the new terms, Francisco Partners will invest $150 million in exchange for a 6.3 percent in the new company's shares.

ST Microelectronics will account for 48.6 percent of Numonyx's shares and $364 million through a combination of cash and long-term subordinated interest-bearing notes. According to both Intel and ST Microelectronics, the new business will be located in Europe, Switzerland, and will mostly focus on developing and researching on NOR and NAND flash memory. The company will also take care of manufacturing and marketing.

In the near future, Numonyx will also attempt to develop the next generation of flash-based storage built on the innovative chalcogenide phase change memory.