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Spansion to implement massive cost-cutting measures

Posted: 20 Apr 2007 ?? ?Print Version ?Bookmark and Share

Keywords:NOR flash market? Spansion restructuring?

In response to losses and poor market conditions in the NOR flash sector, Spansion Inc. said that it will undertake large-scale, cost-cutting measures.

Those actions include the sale of non-performing assets, the consolidation of certain functional operations and other activities related to reducing expenses. The company's goal is to reduce 2007 planned expenses by approximately $50 million to $100 million.

For the quarter ended April 1, the company also reported net sales of $628 million, an increase of 12 percent over net sales of $562 million for the first quarter of 2006.

ASP per bit decline in the first quarter was greater than the average seasonal patterns and higher than the company expected due to the intense competitive environment in the industry, contributing to a sequential quarterly total net sales decrease of 8.7 percent. Net loss for the first quarter of 2007 was $75 million, or 56 cents per share, compared with a net loss of $52 million, or 40 cents per share, in the first quarter of 2006.

Spansion's problems in part are due to one of its biggest customersMotorola Inc., which is having tough times.

- Mark LaPedus
EE Times

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