Spansion Broadens Strategy for Partnerships in Technology Development and Manufacturing

Spansion Broadens Strategy for Partnerships in Technology Development and
Manufacturing
To Focus Capital on Leading-Edge Technology and Resources for Margin Enhancing
Opportunities

SUNNYVALE, Calif., June 19 /PRNewswire-FirstCall/ -- Spansion Inc.
(Nasdaq: SPSN), the world's largest pure-play provider of Flash memory
solutions, today announced the broadening of its corporate strategy to create
strategic alliances, with plans to transfer certain assets to third parties
and establish manufacturing and technology partnerships. Spansion plans to
focus its own capital investments on the accelerated development of
leading-edge MirrorBit(R) Flash memory technology, the development of
value-added, high margin solutions, as well as its state of the art
300-millimeter SP1 Flash memory manufacturing facility in Aizu-Wakamatsu,
Japan.
(Logo: http://www.newscom.com/cgi-bin/prnh/20060118/SFW077LOGO)
Spansion initiated this strategy in September 2006 when the company
entered into an agreement to divest its JV1 and JV2 manufacturing facilities
to Fujitsu. This transaction resulted in approximately $150 million in cash to
Spansion.
"The plan to partner through strategic alliances is a deliberate program
to focus investments and resources on strategic, differentiated and value-
added business opportunities," said Bertrand Cambou, CEO of Spansion. "At the
same time, we can focus our investments and support the right mix of assets to
maintain and increase our competitive advantage."
The strategic partnerships are initially anticipated to cover three
primary focus areas: development of new technologies; final test and assembly;
and mature and trailing-edge wafer manufacturing. As part of the strategy,
Spansion plans to continue to partner with foundries for the production of
high volume commodity products, enabling Spansion to benefit from the scale of
much larger players. In addition, the company plans to transfer some of its
world-class manufacturing, test and assembly assets to third parties, who can
leverage those capabilities to address a broader diversified customer base,
while providing Spansion the same level of service and support at a
competitive cost. As a result, Spansion expects to focus its capital on its
own core competency, the manufacturing and development of leading-edge
MirrorBit Flash memory technology while leveraging the expertise of its
partners.
About Spansion
Spansion is a leading Flash memory solutions provider, dedicated to
enabling, storing and protecting digital content in wireless, automotive,
networking and consumer electronics applications. Spansion, previously a joint
venture of AMD and Fujitsu, is the largest company in the world dedicated
exclusively to designing, developing, manufacturing, marketing and selling
Flash memory solutions. For more information, visit http://www.spansion.com.
Cautionary Statement
This release contains forward-looking statements that are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995, including statements regarding including plans to transfer certain
manufacturing and technology development assets to third parties and establish
related partnerships, plans to focus capital investments on: (i) the
accelerated development of leading-edge MirrorBit(R) Flash memory technology;
(ii) the development of value-added, high margin solutions; and (iii) the
company's 300-millimeter SP1 Flash memory manufacturing facility in Aizu-
Wakamatsu, Japan, the expectation that planned strategic partnerships will
cover three primary focus areas: (i) development of new technologies; (ii)
final test and assembly; and (iii) mature and trailing-edge wafer
manufacturing, plans to continue to partner with foundries for the production
of high volume commodity products and the expectation to benefit from the
scale of much larger players, plans to transfer manufacturing, test and
assembly assets to third parties, while providing the company the same level
of service and support at a similar cost. Investors are cautioned that the
forward-looking statements in this release involve risks and uncertainties
that could cause actual results to differ materially from the company's
current expectations. Risks that the company considers to be the important
factors that could cause actual results to differ materially from those set
forth in the forward-looking statements include the possibility that the
company is unable to identify qualified and interested strategic partners or,
if such partners are identified, negotiate favorable agreements with such
partners, that prospective partners are unable to obtain necessary financing
to complete any proposed transactions, that the planned outsourcing of certain
services does not generate the expected cost savings, demand for the company's
Flash memory products will be lower than currently expected; that average
selling prices may decline; loss of key intellectual property arrangements
creates a greatly increased risk of patent or other intellectual property
infringement claims; the high cyclicality of the Flash memory market which has
experienced severe downturns; that adverse financial market conditions may
impeded access to or increase the cost of financing operations and
investments; that Spansion may not be effective in expense reduction efforts;
that OEMs will increasingly choose NAND-based Flash memory products over the
company's MirrorBit architecture-based Flash memory products for their
applications; that the company has a significant amount of debt, and such debt
could subject us to restrictive covenants; that the company may not achieve
facilities and capacity implementation schedules as a result of factors such
as insufficient cash flows and unavailable external financing; that the
company may lose a key customer, or experience a reduction of demand from a
key customer; that the company will not successfully develop, introduce and
commercialize new products and technologies or to accelerate our product
development cycle; that competitors may introduce new memory or other
technologies that may make our Flash memory products uncompetitive or
obsolete; that the company may fail to successfully develop next generation
products; customers' ability to change booked orders may lead to excess
inventory; that the company's investments in research and development may not
lead to timely improvements in technology; that the company may experience
manufacturing constraints or fail to achieve manufacturing efficiencies; the
company may experience manufacturing disruptions of suppliers interrupt supply
or increase prices for raw materials; that Spansion may not realize the
expected value of Saifun's NROM technology; the merger with Saifun may not
result in benefits that Spansion anticipates as a result of integration or
other challenges; and intellectual property claims or litigation could cause
the company to incur substantial costs or pay substantial damages or prohibit
sales of its products. The company urges investors to review in detail the
risks and uncertainties in the company's Securities and Exchange Commission
filings, including but not limited to the company's Annual Report on Form 10-K
for the fiscal year ended December 30, 2007 and the company's Quarterly Report
on Form 10-Q for the fiscal quarter ended March 30, 2008. The company assumes
no obligation to update any forward-looking statements or information included
in this press release.
Spansion(R), the Spansion Logo(R) , MirrorBit(R), MirrorBit(R)
Eclipse(TM), ORNAND(TM), ORNAND2(TM), HD-SIM(TM) and combinations thereof, are
trademarks of Spansion LLC. Spansion, the Spansion Logo and MirrorBit are
registered in the US and other countries. Other names used are for
informational purposes only and may be trademarks of their respective owners.
SOURCE Spansion Inc.

Press, Courtney Brigham of Spansion Inc., +1-408-616-5056; or investors, Linda
Rothemund, +1-415-445-3236, linda@marketstreetpartners.com, for Spansion Inc.