Numonyx was created in 2008 by combining the lossmaking memory chip operations of STMicroelectronics and Intel, in an effort to create a business with enough critical mass to reach profitability. It focused on memory chips that are used mainly in mobile phones.
However, the company remained a distant sixth in terms of sales in the memory chip market, behind Samsung, Toshiba, Hynix, Micron and Intel, according to iSupply, the chip industry analysts. The combination with Numonyx is expected to allow Micron to overtake Hynix of South Korea for third place.
Micron, which focuses on memory chips used in desktop and laptop computers, said the Numonyx deal would help it diversify further into the growing market for mobile phones. As smartphones become increasingly powerful, their need for memory is growing, and even lower-end phones are increasing basic storage capacity.
Analysts said the move could help Micron challenge Samsung as a one-stop-shop for memory products.
Micron will issue 140m shares to Numonyx shareholders STMicro, Intel and Francisco Partners, the financial services company. An additional 10m Micron shares could be issued if the company’s share price falls significantly below the current price of $9.08.
STMicro, which owns 48.6 per cent of Numonyx, said it would receive shares worth $527m from the deal. It will also be freed from the $225m worth of debt guarantees for Numonyx.
Carlo Ferro, chief financial officer, said the deal would have a $800m positive impact on the ST Micro balance sheet. It is also a further step in ST Micro’s strategy to move away from unprofitable and capital-intensive manufacturing such as memory chips.
Source : http://www.ft.com/cms/s/0/f684f494-163b-11df-8d0f-00144feab49a.html
However, the company remained a distant sixth in terms of sales in the memory chip market, behind Samsung, Toshiba, Hynix, Micron and Intel, according to iSupply, the chip industry analysts. The combination with Numonyx is expected to allow Micron to overtake Hynix of South Korea for third place.
Micron, which focuses on memory chips used in desktop and laptop computers, said the Numonyx deal would help it diversify further into the growing market for mobile phones. As smartphones become increasingly powerful, their need for memory is growing, and even lower-end phones are increasing basic storage capacity.
Analysts said the move could help Micron challenge Samsung as a one-stop-shop for memory products.
Micron will issue 140m shares to Numonyx shareholders STMicro, Intel and Francisco Partners, the financial services company. An additional 10m Micron shares could be issued if the company’s share price falls significantly below the current price of $9.08.
STMicro, which owns 48.6 per cent of Numonyx, said it would receive shares worth $527m from the deal. It will also be freed from the $225m worth of debt guarantees for Numonyx.
Carlo Ferro, chief financial officer, said the deal would have a $800m positive impact on the ST Micro balance sheet. It is also a further step in ST Micro’s strategy to move away from unprofitable and capital-intensive manufacturing such as memory chips.
Source : http://www.ft.com/cms/s/0/f684f494-163b-11df-8d0f-00144feab49a.html
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