Hynix and STMicro Call Off NOR Memory Partnership Discussions

| About: STMicroelectronics NV (STM)

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Memory-Chip Partners End Expansion Talks

  • Summary: South Korean's Hynix Semiconductor announced it has ended talks with STMicroelectronics (NYSE:STM) on a proposed NOR flash memory chip partnership. Hynix explained that it prefers to concentrate its efforts in NAND flash memory. NOR chips are generally used for cellphones, while NAND is prefered in MP3 players and digital cameras. STMicro and Hynix already have a NAND flash joint project.
  • Comment on related stocks/ETFs: The broken-off talks should not have a significant impact on STMicro stock -- the company is broadly diversified (it produces ASIC chips as well), and it's unlikely this project was priced-in. NAND remains the higher-growth and more lucrative sector of flash memory production. Of the 'pure play' flash companies, Saifun appears the most richly valued, at 11.6x trailing 12 months' sales, while Silicon Storage stocks sells for less than 1x trailing 12 months' sales.

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