AMD 2006 Annual Report Download - page 274

Spansion Inc.
Notes to Consolidated Financial Statements
1. Nature of Operations
The Company
Spansion Inc. is a semiconductor manufacturer headquartered in Sunnyvale, California, with manufacturing, research and assembly operations in the
United States and Asia. The Company designs, manufactures and markets Flash memory devices that encompass a broad spectrum of densities and features to
address the integrated Flash memory market. The Company’s products are marketed under the Spansion® global product brand name.
The Company’s Flash memory devices are incorporated into a broad range of electronic products, including mobile phones, consumer electronics,
automotive electronics, networking and telecommunications equipment and PC peripheral applications.
Spansion LLC, the former manufacturing venture owned 60 percent by Advanced Micro Devices, Inc. (AMD) and 40 percent by Fujitsu Limited (Fujitsu),
was reorganized into Spansion Inc. and completed its underwritten initial public offering (IPO) of its Class A common stock on December 21, 2005. The
Company’s shares of Class A common stock trade on The Nasdaq Global Select Market under the symbol “SPSN.”
History of the Company
In 1993, AMD and Fujitsu formed a corporate manufacturing venture, Fujitsu AMD Semiconductor Limited (FASL).
FASL produced wafers containing Flash memory circuits. These wafers were then sold to AMD and Fujitsu, who separated the circuits on each wafer into
individual die, processed the die into finished goods and sold the finished Flash memory devices to their customers. AMD and Fujitsu performed all research and
development activities for the design and development of Flash memory devices and developed the manufacturing processes that were to be used in the operation
of the fabs to manufacture Flash memory devices. Through June 30, 2003, FASL contracted with AMD and Fujitsu for the receipt of certain support and
administrative services (See Note 5).
As of June 30, 2003, in order to expand their existing manufacturing venture, AMD and Fujitsu formed a limited liability company called FASL LLC and
later renamed Spansion LLC. In addition to its 49.992 percent ownership in FASL, AMD contributed to Spansion LLC its Flash memory inventory, its wafer
manufacturing facility located in Austin Texas, its Flash memory research and development facility (the Submicron Development Center (SDC)) located in
Sunnyvale, California, and its Flash memory assembly and test facilities located in Thailand, Malaysia and China. Fujitsu contributed to Spansion LLC its 50.008
percent ownership interest in FASL, its Flash memory inventory and its Flash memory assembly and test facilities located in Malaysia. Both AMD and Fujitsu
transferred employees to Spansion LLC to perform various research and development, marketing and administration functions. AMD and Fujitsu also provided
working capital to Spansion LLC in the form of cash contributions and loans (See Note 9). As a result, Spansion LLC began manufacturing finished Flash
memory devices which through the first fiscal quarter of fiscal 2006 were exclusively sold to AMD and Fujitsu. In the second quarter of fiscal 2006, the
Company began selling its products directly to customers previously served by AMD (See Note 5).
Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007