Numonyx BV, a joint venture run by STMicroelectronics NV and Intel Corp., extended an agreement to work with Hynix Semiconductor Inc. for five years to accelerate development of memory chips used in phones and music players.

The companies will work more closely than before because the semiconductors, known as Nand chips, are getting more difficult to make, Saul Zales, a Numonyx vice president, said yesterday in an interview. The existing partnership with Hynix has produced more than 20 products, he said.

Intel, the world's largest computer-chip maker, and STMicroelectronics, the largest chip producer in Europe, combined their unprofitable flash-memory units in March to focus on Nand chips. That market is splitting into pieces each worth a few billion dollars, and working with Hynix will help Rolle, Switzerland-based Numonyx compete more effectively, Zales said.

STMicroelectronics owns 48.6 percent of Numonyx, while Intel owns 45.1 percent. Buyout fund Francisco Partners took a 6.3 percent stake in exchange for a $150 million cash investment in March.

STMicroelectronics, based in Geneva, rose 31 cents to 7.51 euros yesterday in Paris trading. The stock has lost 23 percent this year. Intel, based in Santa Clara, California, advanced 64 cents to $23.02 in Nasdaq Stock Market trading and has declined 14 percent this year.

Source:Bloomberg