In May of this year Intel, Switzerland-based STMicroelectronics and private equity firm Francisco Partners announced that they were jointly forming a new company based in Switzerland that would focus on producing flash memory chips for consumer and commercial devices. 

Under the purported deal, Intel was to sell its NOR memory assets and STMicroelectronics was to sell its flash memory, NAND joint venture interests and NOR resources to the new venture.  Things seemed to be going along swimmingly until this week when the Federal Trade Commission (FTC) decided it needed more information and has indicated it is now taking a “second request” look for potential antitrust violations. 

Reportedly, second look requests by the FTC are not customary and may indicate that the FTC has concerns about approving the deal. The EC’s antitrust bureau already approved the deal several weeks ago.

Combining Intel’s NOR assets and STMicroelectronics puts a serious crimp in the competition within the flash memory industry, reducing the number of major producers from four down to three, with only the new proposed entity, Samsung and the joint venture formed between AMD and Fujitsu remaining.

The move by the FTC will at least delay approval of the new Swiss venture until after the FTC reviews all the information it requests and then issues a determination that the second request criteria has been satisfied.