AMD and Fujitsu soon plan to merge their flash-memory businesses and create the world’s largest supplier of flash-memory, overtaking Intel in the USA, according to the Financial Times. The joint-venture will be headed by AMD and will design, manufacture and package flash-memory chips. Its annual sales are expected to reach about $3 billion.

The partners plan to establish the company in January 2003, with AMD expected to take a stake of about 60% and Fujitsu 40%. Both parent groups would contribute their intellectual property and interest in the operating facilities. AMD is also expected to incorporate Fab 25, its fab in Texas, which recently began producing flash-memory chips. This would allow the new company to offer high-end flash memory, which has larger profit margins.

In fact, Fujitsu and AMD have a 50-50 joint-venture in flash-memory production based in northern Japan - Fujitsu AMD Semiconductor (FASL). This manufacturer sells products to the two groups, which market their own flash-memory chips separately.

According to preliminary data, the shares of the new company may be sold in public, however, it is not yet finally decided. This would have been very logically to Fujitsu, since semiconductor industry in Japan currently has its tough times, as a result, the company may not be able to invest a lot of money in the joint-venture.