Rubjm
I'm not sure how Spansion is going to finance itself given the rev shortfall. Benefits are expected in q3, half in q2. But the goods need to be sold too, which was a bit more the problem than I expected (lower end of guidance). I don't see China kicking back into gear immediately.
We will get a detailed update on cash situation. There is some cash that came from Seifun, there is some more cash that comes from operations, and, of course there is CapEx.
According to Spansion, the level capacity level where Spansion wants to be at is about to be reached (I am not sure if Q1 or Q2) and after that, further CapEx is contingent on growing revenue.
If Glen Yeoung from Citi is right about 84M of cash flow from operations at the 570M revenue level, that's not bad. Of course, we want revenues to be higher, but Spansion is at sustainable level, while at the same time, Spansion achieved crucial step of having a revenue producing 300mm plant. That's plenty of cost advantage (combined with Mirror and Quad bit) over competitors.
With Numonyx being a standalone entity, intent on pricing product at sustainable level, things should start improving. Not necessarily right away in Q2, but Q3 and Q4 should be better.
Joe |
