Intel and Micron are to form a third company to make NAND Flash memory chips, the two companies announced today, almost as soon as Apple said it was paying $1.25bn to secure Flash supplies through 2010.
Apple's largesse will be spread among five chip makers - Intel, Micron, Samsung, Toshiba and Hynix. Apple didn't say how the money would be shared out, but Intel and Micron have since said they're getting $250m each.
The $500m will, in part, go into the formation of their joint venture, IM Flash Technologies, which will "exclusively manufacture product for Micron and Intel". The partners said a "significant portion" of each of their shares of IM's output will be delivered to Apple.
Shareholders and regulators have to approve the deal, of course, but if they do it will become a legal entity by the end of the year. Intel and Micro will both put up $1.2bn in "cash, notes and assets" for IM, and then both contribute a further $1.4bn over the next three years and "make additional investments as appropriate to support the growth of the operation".
IM will be 51 per cent owned by Micron and 49 per cent owned by Intel. It will begin production in Boise, Idaho, Micron's home town, though plants in Manassa, Virginia and Lehi, Utah will also be among IM's first fabs.
Micron and Intel said IM will "aggressively" convert to its parents' 72nm and 50nm fabrication technology. ®