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Intel, Micron Set Stage for More Flash Collaboration

The expansion of an alliance between Intel Corp. (Nasdaq: INTC) and Micron Technology Inc. (Nasdaq: MU) to mass produce 34-nanometer NAND Flash memory chips will likely inspire more collaborative ventures between traditional industry competitors. This is good news for the ultimate enterprise purchasers of solid-state disks (SSDs) and other NAND-inclusive devices who are interested in the highest quality of service for a proven product that comes with competitive price points.

The main reasons rivals are likely to work together is "the cost of a new chip fabrication facility is around three to four billion dollars today," says Dave Baglee, co-executive officer for IM Flash Technologies LLC, the current joint venture between Intel and Micron. "It is an enormous capital outlay to put upfront, before you have developed the product. You also have to worry whether the product you produce from the facility gets consumed by the market."

These are not small worries in today's troubled economic times, which have many tech firms and enterprises treading water before making purchases for performance-improving NAND memory chips and SSDs.

By sharing a fabrication facility, as they currently do in Utah, Intel and Micron eliminate the need to build their own separate fabrication facilities. The synergy goes further, because partnership combines Intel's expertise in computer processing and flash memory with Micron's expertise in DRAM and memory manufacturing.

The challenge, of course, is how to maintain a brand and line of products in the market without sharing too much information with a partner that is going to end up as a competitor.

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