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

To: Pam who wrote (3353)	2/13/2008 10:07:36 AM
From: Joe NYC	Read Replies (1) \| Respond to of 4590

Pam, There is no question that Spansion has a better cost structure with 300mm fab ramping (still need to figure out how does 20kwpm compare with legacy 200mm capacity) Are you talking about total capacity or cost of one vs. the other. If capacity, then yeah, Spansion is ramping capacity. But Spansion was ramping up sales before the capacity was in place, and TSMC was used to fill the gap. Now, tne production of SP1 is first of all going to fill this gap, and second of all, will hopefully need to market share gains. As far as cost, as I said in another cost, there is a lot of legacy product that needs to be filled with that 200mm capacity. I envision steady ramp up of SP1, and at some point a ramp down of JV3. Good thing is that it is the same site, so some workers can just be transferred. and their lower cost implementation of NOR using MirrorBit and Quadbit. They will prevail IF the industry behaves rationally but what if they act irrationally, just as in the past? Spansion needs to remain solvent longer than other players can be irrational! That's why I am anxious to see the Numonyx deal close - finally. Numonyx - once a standalone company - will have a cap of how long and how irrational they can be. One thing about the delay, there is a probability (however small) that the deal will just completely fall apart, and Intel + STM just decide to pull the plug, sell assets in a firesale, and take the hit of the layoffs. Like I said, the probability of a complete collapse of the deal is extremely small, but it grows with every delay. As time goes on, Spansion technology advantage grows. The bigger percentage of Spansion output is 65nm Mirrorbit (or Quad bid), some on 300mm, the further behind Numonyx will be. Joe