Intel and STMicroelectronics have decided to delay the merger of their flash memory units amid changes to the financing of the deal. The new company, to be called Numonyx, will be formed by March 28 instead of the end of 2007 as originally planned.

The revised financing terms include a loan of up to $650 million, instead of the $1.3 billion loan they anticipated when the deal was announced in May, plus a $100 million line of credit. Once the deal is complete, Intel will take a 45.1 percent stake, STMicroelectronics will take 48.6 percent, and Francisco Partners, a private equity group, will invest $150 million for the remaining 6.3 percent stake.

STMicroelectronics and Intel expect the combined company, which will design and manufacture both NOR and NAND flash memory chips, to have $3.6 billion in annual sales. This would make Numonyx bigger than the current market leader, Spansion a joint-venture between AMD and Fujitsu.