SANTA CLARA, CA - Intel expects lowered profits in the first quarter, as the company sees falling flash memory prices.

The company announced that it was reducing its expectations for gross margin by 2%, due to lower than expected prices for NAND flash memory chips.

According to reports, Intel will move out of the fluctuating flash memory market by creating a joint partnership with STMicroelectronics and technology investment group Francisco Partners. The company, called Numonyx, will manufacture flash memory for the companies and allow both to get their flash memory businesses off the books.

Numonyx will supply non-volatile memory for MP3 players, digital cameras, computers and other high-tech equipment.

Apple has reportedly also cut its flash memory purchases for 2008, as credit tightens and prices increase.

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