Intel

(INTC) - Get Report

is not consideringspinning off and floating shares of its money-losingflash memory chip unit, CEO Paul Otellini said duringa recent visit to Malaysia.

"We are not currently thinking about those kind ofthings," Otellini told reporters in response toquestions about a possible spinoff and initial publicoffering of the flash memory business, according tonews reports.

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Speculation has been building that Intel mightdivest itself of its flash memory business ever since thecompany announced in April that it was undertaking abroad internal restructuring. CFO Andy Bryant said atthe time that Intel would be taking a hard look atanything "with a bracket on it," meaning any divisionthat wasn't profitable.

According to Intel's latest annual report, theflash memory business has lost money for the pastthree years in a row. In 2005, the flash business hada $154 million operation loss on revenue of $2.28billion.

Those results are primarily based on the NOR flashthat Intel has sold for many years. In November, Intellaunched a joint venture with

Micron

(MU) - Get Report

to manufacture the more popular NANDflash chips.

Flash memory retains data even when the power isswitched off, making it an ideal means of storing datain electronic gadgets such as MP3 players, cell phonesand digital cameras.

Earlier this month, Intel said it was separatingits NOR flash manufacturing facilities from its mainchip manufacturing operations and would fold themwithin the flash memory group. Some analystsinterpreted the move as a sign that Intel was preppingthe business for spinoff.

"What we are thinking about is simply allowing thememory factory team to work much more tightly alignedwith the design team," Otellini told reporters in theNorth Malaysian state of Kedah, where he was attendingthe opening of a $40 million chip design anddevelopment center.

In December, microprocessor rival

AMD

(AMD) - Get Report

spun off its NOR flashmemory group, dubbed

Spansion

(SPSN)

.

Shares of Intel were recently off 2 cents to $17.87; the stock hit a 52-week closing low on Wednesday.