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STMicroelectronics the likely buyer of Intel's Israeli NOR facilities sources indicate

According to Reuters, sources close to Intel indicate that the chip giant is in the process of shutting down its chip manufacturing facility in Jerusalem. The same report also mentions that Intel is considering selling its flash memory manufacturing facility in Qiryat Gat, southern Israel. The buyer is said to be STMicroelectronics, one of the world's largest chip manufacturers. The prices for Intel's Qiryat Gat memory facility is estimated to be roughly $1.5 billion USD but does not include any current debt that Intel might have outstanding.

Intel's Jerusalem facility, also known as Fab 8, was the first Intel wafer fab built outisde the U.S.  It first opened in 1985.

When asked to comment, representatives from both Intel and STMicroelectronics declined to comment. STMicroelectronics is also in the business of NOR flash memory, standing at the world's fifth largest manufacturer.

Haaretz Newspaper's online arm, The Marker Online, published that Intel's flash memory business in Israel may also go to STMicroelectronics -- a company that previously stated it would like to either partner with an existing leader in memory products or purchase from a rival and resell.

Intel previously mentioned that it would not be laying off any of its employees in its NOR flash memory business.

Intel has been shutting down various areas of its business since early 2006, all while making plans and activities to open new facilities world-wide. DailyTech reported yesterday that Intel is currently in the process of opening a new 65nm chip manufacturing facility in China -- the first of its kind for the region. Intel also has a 45nm facility to enter production later this year in Arizona called Fab 32 and another Israeli facility arriving in 2008.

Even if Qiryat Gat NOR facilities are sold, Intel still has significant resources in its Haifa, Petach Tikva and Yakum design centers.


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Makes some sense...
By erwos on 1/16/2007 5:27:56 PM , Rating: 2
If they've got a pair of 45nm facilities opening up, it may be a better deal for Intel to just sell off the 65nm facility to STMicro rather than retool it for 45nm. The Israelis won't really care - hell, if Intel's still investing there, then they've really gained by diversifying out a bit and getting STMicro in the country.

I _am_ surprised they're selling the flash facility, though. That's always been something of a revenue smoother, from what I understand.




RE: Makes some sense...
By jfrjimenez on 1/16/2007 6:09:51 PM , Rating: 2
I understand if they're closing down manufacturing facilities, but what does this mean for the R&D facilities? I'd be shocked if they closed down Israel development after what they've done with Pentium-M and Conroe...


RE: Makes some sense...
By irev210 on 1/16/2007 6:18:11 PM , Rating: 2
One word-

IMFLASH


Anyway, they are not getting rid of design team in Israel. They are just selling an old FAB.


RE: Makes some sense...
By MrDiSante on 1/16/2007 6:21:01 PM , Rating: 2
Agreed - if they close down Israeli R&D it's probably be single stupidest move (include Prescott/Netburst) Intel would have made (not sure how the grammar's supposed to work on that one).


RE: Makes some sense...
By Alexvrb on 1/16/2007 6:38:12 PM , Rating: 2
I'm sure they won't kill their Israeli R&D. The design efforts over there helped pull Intel's butt out of the fire.


RE: Makes some sense...
By Chillin1248 on 1/17/2007 10:20:57 AM , Rating: 3
I just want to point out some things that the newspapers here in Israel were saying:


1)- If Intel is selling anything, it is ONLY the Flash based facilities.

2)- The Jerusalem plant produces chips for the automobile industry.

3)- Intel, which has operated in Israel for more than 30 years, is building a new USD 4 billion chip plant alongside the existing one in Kiryat Gat. The new plant will be Intel's second 45 nanometre factory in the world.

4)- The US chip giant is one of Israel's largest exporters with USD 1.19 billion in exports in 2005.

--------
Chillin


RE: Makes some sense...
By Samus on 1/17/2007 8:57:39 AM , Rating: 2
right. this facility invented the pentium m line, which lead to the centrino, core, core duo, etc.

they pioneered the way to intel to move away from netburst, which, hell, has saved the company as far as i'm concerned.


Typographical error
By Cerberus81 on 1/16/2007 7:14:04 PM , Rating: 2
"Intel's Jerusalem facility, also known as Fab 8, was the first Intel wafter fab built outisde the U.S."

Should be "wafer", I believe.




RE: Typographical error
By glennpratt on 1/16/2007 7:40:12 PM , Rating: 2
Beat me too it.

Wafter fab however is another name for my butt.


closing
By msva124 on 1/17/2007 5:10:18 AM , Rating: 2
That's a shame. They made some good processors over the years. Oh well, I guess with the Core 2 they've decided to go out on top.

Are they going to sell their other facilities as well?




RE: closing
By leezstuff on 1/17/2007 6:45:31 PM , Rating: 2
Yep. People in Colorado Springs were told yesterday that they'll have their jobs for 6-12 more months...basically until they can sell the plant or simply strip it down and close it.


The source-DAILY TECH
By crystal clear on 1/17/2007 3:25:43 AM , Rating: 3
Some of DAILY TECH previous articles give you all the clues-

Read-

Quote-
According to Intel's press release "Intel currently intends to receive the entire purchase price in cash. However, Intel has the option to take up to $100 million of the $600 million purchase price in Marvell common stock. Upon closing, Marvell may record a one-time charge for purchased in-process research and development expenses."

2006 has been a year of restructuring for Intel. The company made several announcements this year about the reorganization of its memory business. Intel told the press that its NOR memory technology was under examination but promised no layoffs. Intel also announced a deal earlier in the year to jointly develop NAND flash memory with Micron and launched a joint venture called IM Flash Technologies LLC. Intel says that the deal with Marvell will not impact other business areas that focus on the mobile market. Some of Intel's other products use ARM-based technology that Intel previously licensed and the company reassures customers that interruptions will not occur.

http://www.dailytech.com/article.aspx?newsid=3052

Unquote-
The article clearly says-
"2006 has been a year of restructuring for Intel. The company made several announcements this year about the reorganization of its memory business. Intel told the press that its NOR memory technology was under examination but "




By crystal clear on 1/17/2007 2:44:07 AM , Rating: 2
Today Tuesday ,Intel is expected to announce its plans for their Israeli operations.

The plan hopefully will be -
*A new company to be set up,jointly held by Intel+STM+Private investor(group),all 3 holding equal stakes in the company.

*Intel & STM sell their Nor Flash business to this firm.

*the investor group will invest around 3 billions USD or more.

Notes:

#Intel (Kiryat Gat) facility produces the flash memory chips
(for cell phones)
#Intel benefits by a reduction of 5000 employees-in a high volumne manufacturing & a low profitability business in order to stay competitive in the flash market.

# STM has already announced its plan for reorganizing its product segements.

More later on.




Some useful backgrounds.
By crystal clear on 1/17/2007 5:01:54 AM , Rating: 2
"Intel's Jerusalem facility, also known as Fab 8, was the first Intel wafer fab built outisde the U.S. It first opened in 1985."

This is a very old fab, and Intel is apparently losing money on its day-to-day operations.
Fab 8 has 600 employees. The fab currently produces microelectronic components for flash memory processors (VSLI CMOS), as well as components for the vehicle and communications industries. The processors are made with obsolescent technology, which is reportedly why the fab is not worth keeping open, especially since its activity can be consolidated with activity by other Intel fabs around the world.

"Even if Qiryat Gat NOR facilities are sold"

Intel received a $2.4 billion Israeli government grant to build the fab ten years ago-Just remember that-Intel cannot
back off from this commitment.





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