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Spansion files for Chapter 11

Spansion files for Chapter 11

Spansion, flash memory specialist, has filed for bankruptcy protection in both the US and Japan as a result of the slowing global tech market.

Chalk up another scalp for the slowing global economy – the US arm of flash memory specialist Spansion has filed for Chapter 11 bankruptcy protection, and is looking for a buyer pronto.

According to an article published by Reuters – via PC Mag – the company filed papers with US Courts yesterday as slowing demand for solid state products caused a massive dip in turnover.

The company, which held a not-inconsiderable 14 percent of the worldwide solid-state storage market in 2008, is part-owned by AMD (8.7 percent) and Fujitsu (11.4 percent). It's not currently known whether either of these parties would consider bailing the company out of its financial quagmire with an offer to take over the remainder of Spansion – but with the credit crunch biting most sectors of the tech world, it's unlikely either would be willing to stump up the required cash.

The US division of Spansion isn't the first to enter bankruptcy protection proceedings: the Japanese arm lead the way with the local equivalent to Chapter 11 protection filings early last month. Both sections of the company blamed a massive oversupply in the chip market followed by a drop in demand as the global economic slowdown made its severity known.

Assuming the company can recover from its current situation, Spansion hopes to concentrate its efforts on embedded flash memory products – such as can be found within networking devices, DVD and Blu-ray players, and the new breeds of digital video recorders – along with more aggressive licensing of its intellectual properties.

The loss of Spansion as a competitor would leave the flash memory chip market almost entirely to Samsung and Toshiba, the company's main competitors.

Are you starting to wonder if this 'credit crunch' thing might be a big deal after all, or are all the current Chapter 11 filings in the tech sector nothing to be concerned about? Share your thoughts over in the forums.

2 Comments

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Elton 4th March 2009, 06:43 Quote
That's pretty disturbing, we'll be seeing horridly expensive DDR4 and DDR5 chips later on.
Nicb 4th March 2009, 15:49 Quote
I always wished they would change the name Ch 11 Bankruptcy. People hear that name and they think a company is on the verge of going out of business. (Sometimes True) It's just smart business sense when in a type of recession either worldwide or in your own market to consolidate your debt and reduce liability to your suppliers. I hate lay offs but that goes right along with it. This company was expecting considerable growth starting from 2008 and upcoming years. Either this Ch. 11 will help them make it through or believe it or not make the company more attractive to a potential buyer.

I was a Consumer Finance Manager with a company in 2001 and on the board with 10%. It took us 2 years to get out of Ch.11 and afterwards a company bought us out very quickly.
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