I just got off the phone with Spansion's marketing and sales chief Tom Eby who was more than happy to share his thoughts on today's Intel/ST Microelectronics announcement of combining their respective NOR flash memory divisions. Spansion competes with both Intel, STM but also Samsung and Toshiba in the flash memory market. Spansion makes two types of non-volatile memory chips for the wireless handset market: NOR (more suited for code storage like an operating system or applications) and ORNAND (which combines NOR and NAND). Here's a summary of our conversation:

- Intel and ST Microelectronics were already second sources to each others products. Now customers will have to find another "second source" and Spansion is positioning itself to be that one;

- The new joint-venture will have to repay Intel and ST close to a billion dollars for its assets, and can not count on them for future investment. A tough situation in a very capital intensive industry;

- Spansion will be able to scale its current flash memory technology (MirrorBit) up to 32nm. Eby claims that Intel/STM chose a technology that will not let them go beyond 45nm;

- Finally, the $9 billion NOR market is growing at a mid to high single digit per year. "Only in Silicon Valley are we bored with such a market. In Detroit, they will kill for it!", joked Eby.