By Tom Krazit
Monday, March 31 2008 04:45 PM
URL: http://www.zdnetasia.com/news/software/0,39044164,62039555,00.htm

The offspring of Intel and STMicroelectronics, Numonyx, is ready to open its doors amid a volatile market for its flash-memory chips.

Numonyx is the combination of Intel's NOR flash memory business and STMicro's NAND business, which will make it the largest provider of NOR flash memory in the world and the largest flash supplier to the mobile phone market, said Brian Harrison, the former head of Intel's flash memory group and the new CEO of Numonyx. "We have a very broad product line that's not typical of a start-up company by any means," he said.

First announced last year, Numonyx is arriving a little later than expected. The credit crunch that's dragged down the stock market in recent months forced Intel and STMicro to alter the financing for the new company, but everything will be set to go as of Monday.

Numonyx will play in both major portions of the flash memory market. Its primary business, roughly 90 percent, consists of NOR flash memory, so named for the logic gates used to create the chip. NOR memory has traditionally been used as the primary storage in mobile phones, but that's changing as NAND memory becomes faster.

NAND is used in memory cards, MP3 players like the iPod, and more and more in mobile phones--the high-growth areas. As a result, Harrison expects Numonyx's NAND business to grow much faster over the coming year, although at only 10 percent of the total, there's a lot of work to be done.

The problem is that at the moment, the flash memory market is in turmoil. Prices are plummeting as flash buyers like Apple pull back their purchases in the face of a slowing economy. Intel is going to miss its earnings targets for the first quarter because the price of flash fell twice as fast as it had planned going into the quarter.