Mannerisms

Intel and ST will share a $900m payment in transferring assets to the, as yet unnamed, new company which starts off with a $1.3bn loan and a $250m revolver in debt financing.

It was emphasised during the announcement that neither Intel nor ST would be responsible for the loans, and that they have no intention of injecting any further cash into the company.

"The objective we have established is not to lose any money", said ST CEO Carlo Bozotti, adding that to do so would be: "Challenging".

Intel will be contributing all its NOR flash assets and its fab in Israel, ST will be contributing all its NOR and NAND flash assets and its Catania fab shell, for which Euros 542 million in government grants have been approved by the EC, plus an eight inch fab in Singapore, and ST's 16.6 per cent share of its fab in Wuxi, China, in which Hynix has an 83.4 per cent share.

It was stated that the new company would not be in competition with IM Flash, the NAND flash joint venture between Intel and Micron.

"The plan for the new company is NAND growth focussed around the wireless business by stacked solutions and NOR/NAND solutions", said Brian Harrison, who is to be CEO of the new company, "currently it is not our intention to get into the mass, broad NAND space,"

This is not a strategy which is likely to be followed by Hynix which will be focussing on the mass, broad NAND market with its 83.4 per cent share of the Wuxi fab.

Asked about his future intentions towards ST's 48.6 per cent shareholding in the new company, Bozotti replied: "The objective is that the company will go public. This is part of our vision. It's a good opportunity to generate more revenue from the business."