Intel announced on Monday the done deal with STMicroelectronics and the private equity firm Francisco Partners to create an independent semiconductor company – Numonyx – that will produce NOR and NAND flash memory products.

In the joint venture, Intel and STMicroelectronics will both contribute with their flash memory business assets, getting 45.1 percent (Intel) and 48.6 percent (STMicroelectronics) ownership interest, while Francisco Partners will get 6.3 percent in exchange for their $150 million investment.

Numonyx will receive $450 million debt financing from Intesa Sanpaolo S.p.A and Unicredit Banca d’Impresa S.p.A plus $100 million in revolving credit, Intel said in a statement. Approximately 2,500 Intel employees will be joining Numonyx as part of the transaction.

In the meantime, Intel and STMicroelectronics have already started shipping prototype samples of phase change memory (PCM). The code name for these 128 MB devices is "Alverstone," and they were said to become commercially available later this year.

Ed Doller, chief technology officer-designate of Numonyx, said in a statement: “This is the most significant non-volatile memory advancement in 40 years. This is an important milestone for the industry and for our companies.”

“It is rare when a company starts in such a strong position,” Brian Harrison, Numonyx CEO, said on Monday. “The complementary nature of the two parent companies’ products, technologies and expertise has given us a competitive edge,” adding that: “we start with a comprehensive product line-up of leading technologies; dedicated capacity; already leading PCM development and delivery.”

The non-volatile memory market has generated a staggering $22.5 billion revenue in 2007, according to iSuppli estimations, and is expected to surpass $37.7 billion in 2011.

Numonyx currently has 7,000 employees worldwide and facilities across the world, in USA, Italy, China, Israel, Singapore, Malaysia and Philippines.