Intel has made no secret of its desire to grow share in the flash memory space. Flash is an area that has seen revenues skyrocket as sales of solid state music players and flash USB devices have gone through the roof.
The new company will focus on "supplying flash memory solutions for a variety of consumer and industrial devices, including cellular phones, MP3 players, digital cameras, computers and other high-tech equipment."
Intel is clearly aiming high - it badly wants a say in the flash market which is dominated by major players such as Samsung . The new company will combine $3.8 billion (£1.9 billion) worth of research, development, manufacturing, sales and marketing from Intel and STM.
The company will bring together "40 years experience" in non-volatile memory, as well as the next generation of flash - phase change memory.
"[It] will have the people, scale and technology leadership to meet the needs of customers requiring leading-edge products in this highly competitive marketplace," said Paul Otellini, Intel president and CEO.
Both Intel and STMicroelectronics will sell their relevant solid state assets to the new company in a confusing exchange of token money.
"The new company will be positioned to service customers with all of the elements necessary to deliver current and next-generation non-volatile memory technologies," said Carlo Bozotti, STMicroelectronics president.