Intel and STMicro’s JV Delay to Spansion’s Advantage?

Implications: The sluggish memory market combined with the credit crunch changes the dynamic for bank funding of the Intel, STMicroelectronic and Francisco Partners joint venture agreement. This delay could impact select semiconductor capital equipment vendors. Competitor Spansion won’t likely benefit from a 3-month delay unless it extends past the second-half of 2008.  

Analysis: Numonyx, the name chosen for the Intel, STMicroelectronic and Francisco Partners joint venture is a 300mm wafer, 75,000 square-meter fabrication facility in Catania Italy. Construction started in early 2001 and remained an empty shell for several years.  What impact might further delays have on some key semiconductor capital equipment vendors? End use for NOR memory is primarily for wireless handsets, digital music players, digital cameras and computers.  If the Numonyx JV delay continues an advantage could go to Spansion and recently acquired Saifun’s non-volatile technology licensing -- allowing time for Spansion to extent market opportunity by offering NROM and MirrorBit to other semiconductor companies doing SOC (system on a chip) and wanting to incorporate flash technology on their chips.