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STMicroelectronics (NYSE:STM) is close to spinning off its memory chip division, according to analyst Tristan Gerra of Robert W. Baird. Gerra says the transaction could take place in the third quarter, with an announcement “potentially sooner.”

Gerra says one possibility is that the unit could be combined with Intel’s (NASDAQ:INTC) NOR flash business; there has been previous speculation that Intel wants to get out of the NOR business.

Meanwhile, Gerra says that overall, business at STMicro “continues to be weak across the board,” and that the company “has re-enacted very tight expense controls.” He adds that continued strength in the Euro against the dollar “should continue to pressure ST’s gross margin.”

He remains Neutral on ST’s shares, with a $17 price target.

Yesterday, ST was down 12 cents at $19.37.

Source: STMicro Close To Spinning Off Memory Division