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Technology Stocks : Spansion Inc.
CY 23.820.0%Apr 16 5:00 PM EST
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To: NicoV who wrote (3103)1/19/2008 8:46:54 AM
From: bobs10   of 4590
 
You:

According to the graphs, NOR flash was by far the worst segment. I think this is mainly caused by Intel subsidising their NOR operations with CPU revenue for the last 5 years, mainly to deprive AMD from the revenue it needed to finance its growth. This stops this quarter. The big question is if Intels role will be taken over by Samsung, which also has the deep pockets to endlessly engage in a profitless price war.


me:

Yeah, it sort of highlights what we all knew, that the NOR landscape has been a vast wasteland. What was standard practice at INTC was to dump their last generation CMOS equipment into the NOR business as new equipment came on line to produce CPUs. This never really worked, but using fully depreciated equipment to manufacture NOR was very inexpensive. The way I see it Samsung is now trying out the INTC model, attempting to dump their older NAND equipment into the NOR market also. That may work ok for their in-house needs, but wont get them any market share outside of Samsung. Then there's the problem of being saddled with floating gate as the world goes MirrorBit. That was a problem INTC/Samsung didn't have to deal with until recently. Personally I think Samsung will soon realize that their new model is not as good an idea as they thought.

The news out of the INTC CC that INTC was reducing NOR volume and increasing ASPs was just confirmation that the old way of doing things isn't working any more. Not that it ever really did, but as you pointed out there were other reasons to continue the practice.
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