14 DAY TRIAL // Numonyx, the Flash joint venture between Intel, Francisco Partners and STMicroelectronics has been rescheduled for March 28, 2008 due to the companies' facing "significant turmoil" in the financial markets.
The decision has been confirmed by all the chip manufacturers involved in the Numonyx project. The original announcement stated that the new flash memory venture was to start on January the 1st 2008. The three manufacturers' flash producing units were supposed to get merged into an independent and fully-fledged company until the end of the year, but massive lack of money made them push back the merging date.
The steep situation in the semiconductors industry made creditors look sceptically at each major investment, so Intel, Francisco Partners and STMicroelectronics could acquire only half the money necessary for their new investment. The total fundings for the business were floating around $1.55 billion early in May, but lenders can now only provide a senior loan of up to $650 million, and a $100 million committed revolving credit facility.
Intel officials were confident in the business and squeeze money to enter the game ."We are in the process of renegotiating credit agreements, and clearly [the total] will be less. The markets have changed significantly since we first announced the deal". The chipmaker hopes that the new merger would make fortunes overnight, but also would make its presence sensed into the Flash market. Rival AMD already runs its own flash storage business, Spansion.
Francisco Partners will invest $150 million in exchange for a 6.3 percent shareholding, while STMicroelectronics will participate with a senior loan of up to $650 million and a $100 million credit facility to finance Numonyx - which would bring it a total of 48.6 percent of Numonyx's shares. Intel is supposed to bring the rest , but the venture's yearly revenue looks promising and situates around $3.6 billion.