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Spansion subsidiaries outside of U.S. are not part of filings

The deepening global recession continues to take its toll on companies in the technology sector. Many of the companies are fighting the economy and a global oversupply leading to historically low prices for flash memory and other memory products.

Spansion Inc. announced today that it has filed for bankruptcy protection in American courts. Spansion is the world's third largest maker of flash memory. Spansion had recently announced that it was looking into a possible sale of the company. The chipmaker will try to reorganize debt and refocus on more profitable aspects of its business while in bankruptcy.

Along with Spansion, four of its other U.S. affiliates also filed for bankruptcy protection in America. Total assets for Spansion and its affiliates according to court filings totals $3.84 billion and total debts amounted to nearly $2.4 billion.

According to Spansion, it will focus its operations moving forward on its line of embedded flash products, IP solutions, and profitable parts of the wireless segment. Spansion reports that it has consulted with an ad hoc consortium of holders of $625 million in senior secured floating rate notes that are due in 2013. The firm reports that it is engaged actively in discussions with the consortium.

Among the major owners of Spansion are Fujitsu with an 11.4% share of the company and AMD with around 8.7% of the company. AMD recently received shareholder approval to complete the spinoff of The Foundry.

The reasons behind the bankruptcy filing according to court documents include the oversupply of chips on the market that hurt cash flow in 2007 and 2008 along with lost liquidity due to $122 million in sour auction-rate security investments. Another significant case of was what Spansion calls a "sharp decline" in global demand for its products.

Spansion subsidiaries outside of the U.S. and Japan are not involved in the bankruptcy proceedings. The last major flash maker to enter bankruptcy was Qimonda.

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RE: AMD is next
By yomamafor1 on 3/2/2009 11:24:27 AM , Rating: 4
I doubt it.

RE: AMD is next
By tshen83 on 3/2/2009 11:27:46 AM , Rating: 2
Before Christmas 2010. What to bet?

RE: AMD is next
By dani31 on 3/2/2009 11:43:59 AM , Rating: 3
They feared it too themselves, that's why they went fabless and sold a part of the company.

I'm also under the impression is that Intel is making room for them in the marketplace. It needs AMD to disguise its monopoly, and it needs ATI as well to keep Nvidia at bay. Intel won't kill AMD, it could have done it easily already.

RE: AMD is next
By Oregonian2 on 3/2/2009 5:38:32 PM , Rating: 2
Not sure what you mean. You talking about Intel having exited the flash market altogether (spun off to a joint venture called Nymonics or something like that).

Biggest concern is the supply of NOR type flash where I think Spansion was the number one maker (and very important for embedded processor systems).

RE: AMD is next
By yomamafor1 on 3/2/09, Rating: -1
"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone
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