October 21, 2005 8:33 AM PDT

SanDisk to acquire Matrix Semiconductor

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SanDisk announced on Thursday that it plans to acquire 3D memory maker Matrix Semiconductor in a deal valued at approximately $250 million.

SanDisk, developer of the popular USB flash drive Cruzer Mini, is hoping that Matrix's technology will ultimately help its Gruvi cards business. The mini storage cards are designed to enable users to play preloaded content, such as premium music titles, on a variety of handsets, from smart phones to portable digital players. Matrix's 3D integrated circuits are primarily used for storage applications in the video game and music markets.

"Use of the Matrix 3D memory extends beyond video games and hopefully will play an important role in content distribution, such as incorporation in our recently launched Gruvi cards," Eli Harari, SanDisk chief executive, said in a statement.

Matrix's 3D memory is designed to operate as one-time programmable technology and, as a result, does not compete with SanDisk's flash technology, which is rewritable and more costly. The acquisition of Santa Clara, Calif.-based Matrix may serve as a means for reducing manufacturing costs for the Gruvi cards.

SanDisk, based in Sunnyvale, Calif., also plans to support and sell Matrix's 3D products through its various channels and hopes to close the deal by the end of the year.


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