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

To: BUGGI-WO who wrote (3348)	2/13/2008 8:22:16 AM
From: Pam	Read Replies (1) \| Respond to of 4590

You overlooked the major point. Just look a few years into the past - there was Intel as THE big player, AMD and STM, which "copied" Intel. There was a time, AMD lost money with CPUs and earned much money with Flash. Its a while ago. What did Intel thought at that time? Easy, because NOR at Intel is "small" compared to the "rest" lets bring AMD into a worst case mode with selling NOR flash under costs. Thats what Intel did. Just keep in mind - Intel lost e.g. 100Mio. per quarter at Flash and earned 2000Mio. on the CPU side, AMD earned nothing in CPU or even lost money and now lost money in Flash too. Its easy to see the result. Once you keep AMD at low low earnings levels or even "red", they could not invest -> the result is a clear manufactoring lead at Intel -> cost lead etc. pp. Its near impossible to REALLY prove this point, but its easy to see this. NOR was a "good" industry untill Intel decided to fight against AMD in the flash-segment, which was "easy" for Intel. From this utterly Intel-move, the whole NOR industry hasn't reached a healthy status. Thats it. You do not have to prove your point, I agree with everything you described above but that's all history! The question is, can SPSN be profitable in the future, in say, another 4 quarters? The question is, would someone with fresh money thinks that SPSN offers a better risk-adjusted returns compared to what is available elsewhere today? You always want to show, that some stuff is better and in NOR you couldn't make money - the point is, thats clearly wrong. I am not showing you anything. Some of you are trying to compare OrNAND with NAND and trying to compare the cost effectiveness of MirrorBit technology and that honestly is quite silly! You are talking about past profitability for Spansion when it was part of AMD/Fujitsu and had no debt burden and I am talking about profitability in the coming year and beyond from a company which is leveraged. I do not think SPSN will be profitable for whole of 2008 and beyond that is also uncertain at the moment. I have given my reasons for the same- a. no pricing power because of imbalance in Supply/Demand, b. lack of growth as other solutions are replacing part of NOR's business and vendors fighting for new design wins, and c. too much debt on SPSN's B/S in a business that is capital intensive And its still my thought at these times, that the Newco "IPO" will change the landscape again, just because 2 BIG guys have to earn money long-term. Its easy to spot the future when you have this into a mind. Numonyx IPO will essentially do the same thing that AMD/Fujitsu did to Spansion. They will cut costs and spin them off with heavy debt and get rid of the business off their books. Intel and STM will try and salvage as much as they can out of years of investing in this business that they are trying to get rid of. They will support them and help them get some business for a while but after sometime Numonyx will be on its own just like Spansion is, laden with debt in a stagnant market.