Weeks after it sold its optical network component business to Cortina Systems, looks like Intel is about to shed another division.

According to Doug Freedman of American Technology Research an unnamed private equity group is looking to combine the NOR flash businesses of Intel and ST Microelectronics. ST Micro and Intel have been working closely on various Flash related technologies.

Freedman says the deal is at the due diligence stage. He suggests Intel’s NOR flash fabs in Israel and Ireland could be part of the deal. NOR Flash business is a money loser for the company, costing it about $120 million. Freedman estimates that by getting rid of NOR flash division could boost Intel earnings by 2 cents a share.