Spansion broadening outsourcing plans, narrowing focus on MirrorBit flash memory

June 19, 2008 – Spansion says it is extending its plan to hand off manufacturing and technology work to external partners, continuing a “flexible manufacturing strategy” begun nearly two years ago with the sale of two Japanese fabs, in order to focus its capital investments on accelerating development of leading-edge MirrorBit flash memory technology, other “value-added, high-margin solutions,” and its newest SP1 300mm flash memory fab in Aizu-Wakamatsu, Japan.

According to a statement, Spansion plans to continue partnering with foundries to produce high-volume commodity products, handing over both new technology development and mature/trailing-edge wafer manufacturing. It also is offloading some manufacturing test/assembly assets to third parties, in order to maintain service/support “at a competitive cost.”

“The plan to partner through strategic alliances is a deliberate program to focus investments and resources on strategic, differentiated and value- added business opportunities,” said Bertrand Cambou, CEO of Spansion. “At the same time, we can focus our investments and support the right mix of assets to maintain and increase our competitive advantage.”

The increased reliance on partners’ manufacturing capabilities comes just weeks after Spansion said it reduced outsourced work by ~$50M in 1Q08 vs. a year ago, citing higher-than-expected manufacturing efficiencies out of its Fab 25 (Austin, TX) and SP1 (Aizu-Wakamatsu, Japan) facilities.

In September 2006 Spansion sold its JV1 and JV2 facilities in Japan to Fujitsu for $150M; the sites are adjacent to Fujitsu’s Aizu-Wakamatsu fab in northeastern Japan.

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