Intel, the world's largest chipmaker, and European rival STMicroelectronics are merging their flash memory businesses into a new company.
Intel and STMicro have been looking for a partner after sales of their flash memory chips came under pressure.
The private equity group Francisco Partners will pay $150m (£76m) for a 6.3% stake in the new company.
Flash memory is used in devices such as mobile phones, MP3 digital music players and digital cameras.
STMicroelectronics shares rose more than 5% in Paris following the announcement, while Intel shares were up more than 1% on Nasdaq.
Interesting, I just hope it means quicker development on new products rather than increases in licensing and end product costs. BBC News Report