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Analysis: Will Spansion pull off a comeback?

Posted: 24 Jun 2010     Print Version  Bookmark and Share

Keywords:Spansion comeback  NOR flash  memory market  NAND 

Spansion Inc. is looking to make a big comeback. But will it succeed this time around? Or is it doomed to fail—again? Analysts are mixed about the NOR flash maker's future prospects.

Last month, Spansion said that it had emerged from Chapter 11 reorganisation. As report, on March 1, 2009, Spansion filed for Chapter 11 bankruptcy protection. The NOR flash maker was late to emerge from Chapter 11. It was supposed to emerge in Q1 10.

"Spansion stayed in Chapter 11 four plus months longer and lost more market share than planned," according to a new company presentation. It also assumed "$26 million [Rs.119.35 crore] (in) additional bankruptcy related cash cost."

On the positive side, business is up for Spansion and its rivals. "Pricing is better than anticipated on unforeseen NAND/NOR supply constraints," according to Spansion.

During the reorganisation, Spansion focused its business on serving embedded and targeted wireless applications. Spansion has also made several announcements after emerging from Chapter 11.

In May, for example, Spansion announced its new Japanese subsidiary, Spansion Nihon Ltd, acquired the distribution business of Spansion Japan, Spansion's former subsidiary, for Rs.57.38 crore ($12.5 million). Spansion Nihon will continue to serve the Japan market primarily through the Fujitsu sales channel, extending a longstanding partnership between Spansion and Fujitsu that dates back to 2003 when Advanced Micro Devices and Fujitsu created Spansion.

Spansion Japan, located in Aizu-Wakamatsu, continues to manufacture wafers and provide sort services for Spansion on a foundry basis. Spansion Japan, which is no longer part of Spansion, is also suing Spansion.

In March, "Spansion Japan filed an amended general unsecured proof of claim in the U.S. Bankruptcy Court asserting that it has been damaged in the amount of approximately Rs.4,296.74 crore ($936 million) as a result of the November 19, 2009 foundry agreement rejection order. (Spansion) believes that it has strong defences to the amount of Spansion Japan's proof of claim and intends to vigorously contest this matter," according to a filing.

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