STMicroelectronics, Intel and Francisco Partners have entered into a definitive agreement to create a new independent semiconductor company from the key assets of businesses which last year generated approximately $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.
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 percent equity ownership stake and a $432 million cash payment at close. STMicroelectronics will receive a 48.6 percent equity ownership stake and a $468 million cash payment at close. Francisco Partners L.P., 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. 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.
With assets and resources from Intel and STMicroelectronics, including a patent portfolio of approximately 2,500 patents and 1000 patents pending, the new company will have the scale to benefit from the increasing demand for memory resulting from the growing amount of information and content that is becoming more mobile and is now based almost entirely on digital technology. The integration of STMicroelectronics' and Intel's parallel programs on phase-change memory, a key technology capability, will also help to bring the benefits of advanced flash memory technology to potential customers more quickly and efficiently.
Hynix Semiconductor, Inc. has received validation on its DDR3 memory components and modules from Intel.
The newly-validated DDR3 products are 1Gigabit DDR3 SDRAM component manufactured on 80nm process technology, 1Gigabyte and 2Gigabyte DDR3 Unbuffered-DIMMs. These devices have operating speeds of 800MHz and 1066MHz at 1.5V power supply. These speeds are offered in latency combinations of 5-5-5 and 6-6-6 for 800MHz, and 7-7-7 for 1066MHz, to suit the needs of a wide range of PCs, workstations and other applications.
Samsung Electronics Co., Ltd. has developed an 8Gigabyte (GB) microSD (Secure Digital) memory card, a size optimal for today’s multimedia mobile phones. The new fingernail-sized card is capable of storing 2,000 MP3 music files, 4,000 digital photos, or approximately 5 DVD-quality movies.
SD cards, to date, have been largely used for data storage in digital still cameras and increasingly in televisions. MicroSD cards, which are a quarter the size of an SD card, are backward compatible with SD cards using an extender, to allow multimedia files downloaded by mobile phones to be easily displayed on other media.
21 DDR3 solutions, from Samsung Electronics Co., Ltd., have been validated on Intel Corporation's reference platform to work with Intel's next generation DDR3 (Double Data Rate – Version 3) chipsets. This is the largest number of DDR3-based solutions to have passed the validation program.
Samsung's Intel-validated solutions include 13 modules and eight monolithic devices in combinations of 512Megabit (Mb)/1Gigabit (Gb) densities with speeds of 800 or 1066Mb/ps.