Intel, Micron Start to Flash Dance

The two companies said that they would form a new company dedicated to manufacturing NAND flash memory.

Micron and Intel said Monday that they would form a new company dedicated to manufacturing NAND flash memory, of which a "significant portion" will be shipped to Apple Computer.

The venture, which will be 51 percent owned by Micron Technology Inc., will be named IM Flash Technologies LLC. Micron will list IM Flash as a consolidated subsidiary, according to Micron spokesman Dan Francisco.

Each company will initially contribute about $1.2 billion in cash and other assets to the venture, while adding at least $1.4 billion plus additional investments over the course of the next three years. The management team for the new company will be led by Intels Dave Baglee, who previously served as manager of Intel Corp.s Fab 11 in New Mexico, and Microns Rod Morgan, who most recently served as manager of Microns fabrication facility in Manassas, Va.

/zimages/4/28571.gifClick here to read more about Intel investing $450 million in Micron.

While Intel has traditionally designed and manufactured NOR flash for code storage in cell phones, PCs and other devices, the data storage that NAND flash enables has allowed that portion of the market to skyrocket. Revenue in the global NAND flash memory market rose to $2.97 billion in the third quarter, up 30.2 percent from $2.28 billion in the second quarter, iSuppli said in a recent report. In August the firm predicted that overall NAND flash demand would skyrocket 65 percent to $10.9 billion in 2007.

In all, the NAND market has been driven by legions of small-form-factor flash cards used by digital cameras, in addition to newer products like the flash-based Apple Shuffle and now the Apple Nano. On Monday, Apple Computer said that it had signed deals with Hynix, Intel, Micron, Samsung Electronics and Toshiba to secure a steady supply of NAND flash memory through 2010, prepaying a total of $1.25 billion. According to Intel and Micron, prepayments to IM Flash were worth $250 million to each company.

/zimages/4/28571.gifRead the full story on ExtremeTech: Intel, Micron Hold Hands And Enter Data Flash Mart