Intel, STMicro team up for phone memory

Intel and Europe's STMicroelectronics have agreed to produce flash memory to a common specification for phones and collaborate in other areas, a deal that will eliminate some headaches for cell phone manufacturers.

Under the deal, NOR flash memory chips from the two companies will be essentially identical to each other. This began with the existing 90-nanometer generation of flash and will continue through to the new 45-nanometer generation of flash, which will likely debut around 2008 and remain on the market for several years afterward.

Additionally, NOR flash memory produced by the two won't change much from now through the 45-nanometer generation of chips. It will shrink, but remain compatible with boards and software.

Cooperation will also drive down the cost of the two companies' NOR, a key factor in a market where manufacturers often lose money.

Intel an STMicroelectronics will also cooperate on other technical issues, such as designing interfaces and packages that accommodate NOR flash, NAND flash and regular DRAM.

The alliance between the two will likely strengthen the NOR camp in the ongoing NOR-NAND flash battle. Although it generally holds less data than NAND, NOR flash tends to be more reliable. Cell phone makers use it to store applications and code. Research firm iSuppli estimates that 92.8 percent of the flash embedded in phones is NOR.

NAND is primarily used in memory cards to store music or photos. The technology behind NAND, however, has steadily improved and Samsung and other NAND makers have been trying to win cell phone contracts. NAND sales have grown far faster than NOR in the past few years.

Together, Intel and STMicro control around 40 percent of the NOR market.

Although it usually works alone, Intel has now struck two alliances for flash memory in the past few weeks, a shift that underscores the financial and technical challenges facing chipmakers. In November, the company announced it would produce NAND memory with Idaho's Micron Technologies. (Earlier in the year, Intel said it would produce memory for memory cards, but had declined to elaborate at the time).

In the past few years, other companies have entered into alliances to overcome difficulties associated with advancing chip technology. Advanced Micro Devices and IBM, for instance, have teamed up to develop manufacturing technologies while Freescale, Philips and STMicro jointly run a fabrication facility in France.