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ChipMOS issues termination notice to Spansion

Posted: 22 Jan 2009     Print Version  Bookmark and Share

Keywords:NOR-flash  service agreement  IC-packaging  test services 

ChipMOS Technologies Ltd has delivered a notice of breach and notice of intent to terminate a service agreement with NOR-flash giant Spansion Inc.

Spansion currently has an outstanding account receivable with ChipMOS of approximately Rs.285.21 crore ($57 million) of which approximately Rs.90.07 crore ($18 million) is in default, according to the IC-packaging house. ChipMOS provides IC-packaging and test services for Spansion.

''The service agreement provides 30 days for Spansion to continue the agreement with a payment of the amount in default to ChipMOS Taiwan,'' according to ChipMOS. ''ChipMOS Taiwan has also given Spansion notice that pursuant to Article 928 and Article 929 of the Taiwanese Civil Code it has obtained a statutory lien on the Spansion's inventory and related equipment and materials currently in ChipMOS Taiwan's possession.''

ChipMOS Taiwan reserves all of its rights and remedies available under the agreement and applicable law.

Recently, Spansion moved in another direction in packaging. The company and Taiwan's Advanced Semiconductor Engineering Inc. (ASE) signed a memorandum of understanding to establish a venture to jointly own Spansion's IC-assembly operations in Suzhou, China.

Recently, Spansion confirmed that it has been exploring strategic alternatives, ''including, but not limited to, opportunities to merge with or sell to similar U.S. or foreign businesses.''

Amid a string of losses, declining funds and a major downturn, Spansion recently implemented another round of cost-cutting measures. Rumors are also running rampant that Spansion is mulling a plan to file Chapter 11 protection of the U.S. Bankruptcy Code. The company declined to comment.

At one time, there were other rumours about Spansion, including a report that Japan's Toshiba Corp. would acquire the company.

-Mark LaPedus
EE Times

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