Is time running out on Spansion?

Mark LaPedus EE Times  http://www.eetimes.com/showArticle.jhtml?articleID=212701490&pgno=1 SAN JOSE, Calif. -- Is time running out on NOR-flash leader Spansion Inc.? Amid a string of losses, declining funds and a major downturn, Spansion has 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. Regarding the possiblity of filing Chapter 11, a spokeswoman for Spansion (Sunnyvale, Calif.) said: ''We do not comment or speculate on rumors.'' At one time, there were other rumors about Spansion, including a report that Japan's Toshiba Corp. would acquire the company. Sources believe that Spansion and Toshiba were close to signing a deal, but the acquisition was reportedly put on the back burner. Indeed, it's been a rough time for Spansion, the world's leading supplier of NOR flash memory. Recently, Spansion reported a loss for the third quarter of $118.7 million on revenue of $631 million. During the third quarter, the company imposed salary reductions, cut capital spending, frooze headcount and cut research and development projects. In November, the company became the latest semiconductor supplier to issue a warning about revenue in the current quarter, saying it expected fourth quarter net sales to be down about 20 percent sequentially. Last month, Spansion closed its fab in Austin, Texas, for two weeks during the fourth quarter in anticipation of a weak holiday season and deteriorating macroeconomics, Faced with an uncertain future, Spansion confirmed that it is also implementing another round of cost-cutting moves. Pay was cut 20 percent across the board in December; hours were cut 20 percent as well, sources said. ''Varying degrees of salary reductions were implemented as early as October 2008. Schedule changes were implemented beginning the first pay period of 2009. These actions have been implemented as part of a larger global cost cutting strategy to help better position Spansion to weather the storm during the economic downturn,'' the spokeswoman said. Still, employees were called to tell them they were furlowed for this week without pay. Today, the furlow was extended for another 2 weeks--mandatory--without pay. ''We realize this comes at a difficult time, but Spansion has decided to extend its furlough through January across parts of the company. This decision is part of a part of a broader initiative to reduce operating expenses and help align manufacturing output with customer demand,'' the spokeswoman said. Spansion is also telling employees it has enough product for customers to last for three weeks. As a result, manufacturing runs have halted at the firm. ''As a result of the continuing deterioration of the macroeconomic environment, which has resulted in decreased customer demand for flash memory, Spansion has decided to temporarily shutdown its manufacturing facilities for periods in January. This decision is part of a larger strategy to help align manufacturing output with customer demand,'' the spokeswoman said. Green or bust? Spansion is taking steps to remain viable. As part of the moves, Spansion and Taiwan's Advanced Semiconductor Engineering Inc. (ASE) recently signed a memorandum of understanding to establish a venture to jointly own Spansion's IC-assembly operations in Suzhou, China. The move was aimed to cut costs. Spansion has also signed a foundry deal with SMIC. Last month, the U.S. International Trade Commission (ITC) agreed to investigate a complaint by flash memory specialist Spansion against some flash memory chips made by South Korean giant Samsung Electronics Co. Ltd.—as well as downstream products incorporating those chips from some of the biggest names in electronics. And seeking to solve a major power problem in computing, Spansion recently rolled out a new class of memory that is said to replace DRAMs in the datacenter. Dubbed EcoRAM, the new memory device is designed to solve the energy consumption crisis in datacenters. When combined with Virident's new GreenGateway technology, EcoRAM can help slash energy consumption by up to 75 percent in datacenter servers, according to Spansion.