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Technology Stocks : Spansion Inc. -- Ignore unavailable to you. Want to Upgrade?

To: burn2learn who wrote (699)	11/8/2006 11:33:37 AM
From: Joe NYC	Respond to of 4590

b2l, Do you think on some level SPSN needs Intel. Currently NOR growth his limited to the seesaw action of taken some share from each other. Real growth may only be possible by expanding the total available market for NOR. Both are starting to have inroads, but I think I strong NOR eco system is needed to enable further gains against NAND. Kind of (SPSN needs INTC). Remember, SPSN is capacity limited, so it is better if the excess demand goes to Intel rather than NAND. SPSN may be able to win market share easier from Intel than form NAND players, when not capacity constrained. Joe

To: burn2learn who wrote (699)	11/8/2006 1:52:51 PM
From: BUGGI-WO	Respond to of 4590

@B2L - Market " but I think I strong NOR eco system is needed to enable further gains against NAND. " No question, a more healthy overall market will be always better for all players. I think a key point is pricing. As said, if prices fall as fast as volume increases, the losses will widen even further and we even saw faster falling prices in the past. The key point is to get this market in a situation, were supply and demand is in equlib. That was a process the last 2-3 quarters and I think the whole industry is now recovering from the past ugly lows. When we see this, the main gainers will be, which will have the lowest costs and/or best specs. As seen in the last earnings reports, Spansion is (by far) in the best situation here and I see the cost side going down even further, more down compared to the whole industry progress. If and thats the question, if the prices stay at these levels or increase further, which I expect, Spansion we reach a point, were it could show real nice numbers, especially because the number of shares are relativly small. Its a dream scenario, no question, but if prices will increase (just a assumption) by a huge margin - 10-20% (was seen in the past and much more) and volume growth stays at the current levels, its not that far thought, that Spansion could post 50C per share in ONE quarter or more. Add 5-10% units to Q3 and add 10% higher ASPs - Spansions revenue could hit 900Mio. or more. Add further cost reduction due to newer nodes and ongoing processes, its easy to spot the potential. I will not say, that this will happen tomorrow, of course, but its one and not a very unlikely scenario. When we look at the marketshare table, "the other" group is still relativly large. I will not say, that all vendors will be replaced, thats clear, but if Spansion (Intel) take the low-end side serious, these players will loose this volume VERY Fast, just because they couldn't compete with price. If Spansion introduces 4,8,16Mbit with 110nm at the same old spec., SST or even smaller guys will be pressed hard. I don't know if that will be Spansions intention, probably not. But what I wanted to say here is, that I expect more or further market consolidation and the this volume will come from Spansion or Intel or STM ... from the bigger guys. In the end, I don't see the end of the road now for Spansion, I'm still seeing many potential growth storys on the volume side and I'm still seeing upside on the pricing side, just because the market was so depressed for so long. Not a single player earned money and this process is still in place, we know that even Spansion lost the last quarter. Its clear, that this situation will not last forever, so we either see consolidation, market exits or Chapter 11 or higher prices. edit: As written (SIA) , we saw steady ASP increases in the last 3 months. I couldn't predict the future, but this process has just started - my 2C. BUGGI