Is Intel Exiting NAND, and Will Seagate Buy In?

Is Intel (INTC) plotting to get out of the NAND Flash memory business? The microprocessor giant has a joint venture with Micron Technology (MU) called IM Flash Technologies; with Flash memory prices continuing to crumble, Intel may want to exit the business.

Daniel Amir, an analyst with Lazard Capital, writes in a research note that Seagate (STX) might be interested in buying Intel’s stake in the venture. Seagate, which makes disk-drives, has said in the past that it planned to enter the market for flash-based solid-state drives, which can be used as a replacement for hard drives, though for now are too expensive to gain substantial market share.

Avi Cohen, an analyst at Avian Securities, write in response to Amir’s note this morning that “we know STX was in serious talks with Hynix over the last year,” and that “STX needs to do something on the flash side.” Cohen contends Seagate’s ambitions in solid-state drives means “it needs captive capacity.” Cohen wonders if whether Intel’s cross-licensing agreements with SanDisk (SNDK) would still be in place if Seagate bought Intel’s stake in the venture, or whether the JV would be at risk to paying royalties to SNDK. His advice: Seagate should buy SanDisk “and call it a day.” Cohen says he is “sure STX is in talks with all parties and exploring all possibilities.”

This morning:

• Micron is up 9 cents, or 1.3%, to $7.24.
• Intel is up 27 cents, or 1.2%, to $22.55.
• SanDisk is up 16 cents, or 0.7%, to $23.14.
• Seagate is down 14 cents, or 0.7%, to $20.56.