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Spansion streamlines operations, refocuses on Asia

Posted: 10 Jun 2008 ?? ?Print Version ?Bookmark and Share

Keywords:job cut? Asia market? NOR flash memory?

Due to ongoing losses and lackluster demand for NOR flash memory, Spansion Inc. announced it will cut approximately 500 positions worldwide.

The move affects regular, contract and temporary workers in manufacturing, engineering, management and administrative support functions.

As part of a move to cut costs, the company is also pursuing its strategy to increase the ratio of its engineering and administrative functions in lower cost regions, such as Malaysia and China.

The actions are part of the company's ongoing strategic effort to improve overall productivity, which led to a $52 million reduction in manufacturing service expenses with foundries and subcontractors in Q1 2008, compared to Q4 07.

"With our recent increase in manufacturing output and yields, as well as productivity enhancements throughout the company, we can streamline our organization and further reduce costs, while continuing our rapid pace of innovation," said Bertrand Cambou, president and CEO of Spansion, in a statement.

Less foundry dependence
Manufacturing efficiencies resulting in increased output in its Austin, Texas Fab 25 and Aizu-Wakamatsu, Japan-based SP1 fab is expected to allow Spansion to reduce its dependencies on outside foundry support, particularly for 90nm product.

The move impacts its two foundriesTaiwan Semiconductor Manufacturing Co. and Semiconductor Manufacturing International Corp. "Due to the migration of advanced nodes and larger wafers at Fab 25, we have been able to limit the usage of TSMC at 90nm MirrorBit and complete the manufacturing in-house. To help Spansion meet the growing demand for its MirrorBit technology, TSMC has been producing Spansion flash memory wafers at 110nm MirrorBit technology since Q2 2006," a Spansion spokeswoman recently said.

"Our foundry deal, previously announced in October 2007 with SMIC, is planned for 65nm with production targeted for within the next year," she added.

Spansion has struggled to make money. It posted a loss of $118.5 million, or minus $0.85 a share, in Q1. This compares to a loss of $49.5 million, or minus $0.37 a share, in the previous quarter and a loss of $75.5 million, or minus $0.56 a share, a year ago.

For Q1 of 2008, the company reported net sales of $570 million, compared to net sales of $653 million in the fourth quarter of 2007. In the period a year ago, Spansion had sales of $627.8 million.

The company blamed the problems on lackluster demand in China.

- Mark LaPedus
EE Times

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