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AMD, Fujitsu Team on Flash Memory

New company will challenge Intel with Spansion products.

Tom Krazit, IDG News Service

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Advanced Micro Devices and Fujitsu have taken the wraps off their flash memory joint venture, which will sell flash memory chips under the Spansion brand.

FASL LLC is the name of the new joint venture, which builds upon a previous joint venture between the two companies known as Fujitsu AMD Semiconductor. The companies announced the new joint venture in March, hoping that by combining their assets and sales forces, they could capture more market share together than either company could individually.

Aiming at Intel

AMD owns 60 percent of the $3 billion joint venture, and Bertrand Cambou, formerly senior vice president of AMD's memory group, will be president and chief executive officer of FASL. Fujitsu Corporate Senior Vice President Toshihiko Ono will chair the board of the new joint venture. The company will be headquartered in Sunnyvale, California, which is also the base of operations for AMD.

In the second quarter, AMD expects to pick up a few points of flash memory market share at the expense of rival Intel, the market leader, AMD officials said during the company's first-quarter earnings conference call in April.

Betting on a surge in demand for cell phones and personal digital assistants, Intel raised prices on its flash memory chips in the first quarter. That move caused some customers to look elsewhere, Intel executives acknowledged earlier this year.

However, the company continues to refine the technology and pursue the market. It recently developed a new memory-packaging technique that supports stacking as many as five flash memory chips in a single package 1.2 millimeters thick--accommodating one more chip than was previously possible.

Busy Market

Fujitsu AMD Semiconductor is counting on demand continuing to grow, however. A proliferation of portable gadgets is boosting interest in flash memory and other portable storage units for a variety of devices. Secure Digital, SmartMedia, and other flash memory devices are finding a place in digital music players, personal digital assistants, digital cameras, and other handheld devices.

Accompanying the increase in demand that is catching the attention of Fujitsu AMD Semiconductor is a drop in price that is pleasing consumers.

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