EE Times: Semi News
Updated: Is Intel spinning off NOR flash unit?
Mark LaPedus
EE Times
(05/08/2006 12:45 PM EDT)
SAN JOSE, Calif. — Is Intel Corp. planning to sell or spin-off its loss-ridden NOR flash-memory unit?
In a major reorganization, Intel said Friday (May 5) that it will bring its NOR flash memory fabs and memory process technology development effort within the company’s flash memory group.
The move prompted analysts to wonder about the unit. “The company recently separated NOR flash production from core Intel operations, likely signaling the IPO or sale of the business,” said Doug Freedman, an analyst with American Technology Research Corp., in a report on Monday (May 8).
Intel denied the speculation by the analyst. “Intel is not planning to sell or spin out our NOR flash business,” according to a spokeswoman for Intel.
“We have aligned our NOR flash memory product development, technology development, marketing, manufacturing and logistics support operations under the Flash Memory Group (FMG), managed by Intel Vice President Brian Harrison,” the spokeswoman explained.
“The goal of this change is to create closer synergy among all the organizations involved in developing, manufacturing and delivering NOR flash memory products to customers worldwide,” she said. “We expect this alignment will create greater efficiency and productivity for the NOR flash memory business. Our NAND flash business is also part of the Flash Memory Group (as it has been). Our NAND flash is manufacturing though IMFT, our joint mfg venture with Micron.”
Still, many believe that Intel is putting more resources in rival NAND flash, which is growing much faster than NOR. The chip giant also has a joint NAND flash memory venture with Micron Technology Inc., dubbed IM Flash Technologies LLC.
And at the same time, hit hard by the PC slowdown and stiff competition, Intel last month said that it plans to restructure the company. Paul Otellini, chief executive of Intel (Santa Clara, Calif.), told analysts he plans an overhaul that will impact "every part" of the company within the next 90 days.
If Intel spins out the NOR unit, the move would mirror a similar step taken by processor rival Advanced Micro Devices Inc. (AMD). Last year, AMD spun-out its NOR unit, Spansion LLC, into a new and independent company.
Many NOR flash vendors have been scrambling to provide a NAND offering due to dwindling sales for NOR.
Meanwhile, besides NOR flash, which is losing money for Intel, the microprocessor giant has other nagging issues as well. “Intel's platform strategy back fires, adding cost to platforms and accelerating share loss to AMD,” Freedman said, referring to Intel’s strategy to provide a “platform solution” for PC OEMs.
“We believe that vPro is not being well received by the PC channel partners as it adds undue cost and complexity to the enterprise market,” Freedman said, referring to Intel’s newly branded corporate desktop processor strategy.
“Intel believes that platforms are the solution to many issues given the success of Centrino,” he said. “We think Centrino had outside factors that drove increased adoption. vPro and Viiv do not have the same outside investment benefits and are likely to be far less successful.”
There are other troubling issues for Intel as well. “Management is beginning to see that the R&D expense load they have been carrying throughout their history is no longer necessary,” according to the analyst.
“There is no longer a great difference between processors in the notebook, server, and desktop segments, and the company can now begin to leverage this fact in its R&D budget. This has also allowed Intel to move to its recently announced two-year plan,” he said. “It now plans on moving architectures every two years, as opposed to its previous every four years. We believe that this shift is the right decision for a dominant player attempting to protect a monopoly....
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