Intel spins NOR flash division into new company

Considering its recent financial performance, Intel doesn’t seem like as good a candidate for workforce reduction as its main competitor. Nonetheless, as eWeek reports, the world’s largest semiconductor company will soon part with 2,500 of its staffers.

The move isn’t so much a mass firing as a decision by Intel to spin off its NOR flash division into a new company dubbed Numonyx. Intel will retain a 45% stake in the new company, while Swiss semiconductor and electronics manufacturer STMicroelectronics will contribute part of its NAND flash business to Numonyx in exchange for a 48% stake. A private equity firm will own the remaining 6%. Numonyx will produce both NOR and NAND flash devices. (The former flash memory type is typically used in firmware chips like those found in cell phones, while NAND is at the heart of most flash storage devices today.)

Intel already streamlined its NOR business after the division saw quarterly losses of $108 million in early 2006, so the creation of Numonyx isn’t entirely unexpected. eWeek says Intel’s NAND business is also in trouble right now due to market oversupply and economic problems in the U.S., but Intel CEO Paul Otellini has reportedly vowed to rescue that division by investing in new technologies like solid-state drives.

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