Freescale Semiconductor, the chip manufacturer taken private in 2006, is expected to announce Monday 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, they said.
MRAM, which stands for magnetoresistive random access memory and has been in development since the 1990s, is intended to improve on current memory technology because it uses less power than conventional designs and is considered more stable. But it is not widely used yet.
“MRAM technology is one of our crown jewel technologies,” Lisa T. Su, Freescale’s chief technology officer, said.
Plans for the spinoff began about six months ago, as Freescale began talking with Lux Capital about a way to commercialize 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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