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Going down memory lane

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A new type of memory could be on the horizon as several venture capital firms join with Freescale for a plan to spin off a new memory unit
According to reports in the media, Freescale Semiconductor is expected to announce that it will join with several venture capital firms to spin off a unit that focuses on a newer kind of computer memory. The new entity, EverSpin Technologies, comes as Freescale seeks to pare its product line. Freescale will give its portfolio of a memory technology called MRAM to EverSpin and hold a stake in the new company, the companies involved said.

A group of outside firms, including New Venture Partners, Sigma Partners, Lux Capital, Draper Fisher Jurvetson and Epic Ventures, will invest a total of about $20 million. Magneto resistive random access memory (MRAM), has been in development since the 1990s, is intended to improve on current memory technology due to less power consumption than other designs and is considered more stable. Lisa T. Su, Freescale’s chief technology officer, said. “MRAM technology is one of our crown jewel technologies.” Plans for the spinoff began about six months ago, as Freescale began talking with Lux Capital about a way to commercialise its MRAM technology.

Memory technology is not Freescale’s core business, Ms. Su said, and while the company had not considered selling the MRAM unit outright, it and Lux had hit upon the spinoff as a possible solution. But it also comes amid a tougher time for the chip maker, which was acquired for $17.6 billion in 2006 by a consortium of private equity firms. Since then, demand for its products from Motorola, its onetime parent company, and from automakers has fallen, and it is coping with the debt added after its leveraged buyout.

Ms. Su said the new venture was not linked to financial troubles at Freescale: “We’re not doing this for financial reasons, not for cash or anything like that.” Stephen Socolof, a managing partner of New Venture, said his firm and others in the investor group would join in the manufacturing of MRAM and develop other uses for the technology.
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