Despite speculation in the US that chip-making giant Intel is on the brink of selling its loss-making flash memory business, Intel Ireland has said the company "is not announcing the sale of any business unit" at this time.
In a recent research note an analyst with American Technology Research in the US said Intel may be considering selling its flash memory business to a private equity firm and combining it with the memory business of STMicroelectronics.
Speaking to The Irish Times yesterday, Doug Freedman said his information was that Intel "was getting ready to separate the business from its normal operations". He said he had not been able to identify a potential buyer and that Intel may even decide to spin it out as a separate joint venture with rival STMicroelectronics.
Flash memory is used to store data in MP3 players, mobile phones, digital cameras and other electronic devices. Mr Freedman said Intel's flash memory unit was losing on average $120 million (€91 million) a quarter.
Following a series of disappointing financial results, Intel has been on a cost-cutting drive. Last autumn, the company announced a plan to reduce its operating costs by $3 billion annually by 2008.
Any spin out of Intel's flash memory business from its Irish operations would, however, prove problematic. The flash memory unit at Leixlip is part of the Ireland Fab Operations
(IFO) which was formed following the amalgamation of two factories on site that had produced older computer chips. As well as flash memory, IFO manufactures the chipsets for Intel's Centrino mobile technology platform and also produces more complex flash logic products.
The facility is capable of manufacturing 65 different Intel products - three times as many as any similarly equipped Intel factory.
Intel is attempting to move away from a focus purely on computer processors and is developing a platform strategy where more capabilities are integrated into a single product.
This would suggest that even if the company was considering a sale of the flash memory unit, it would wish to retain the IFO facility to support its current strategy.
