The head of flash memory chip maker Spansion resigned on Tuesday and the company announced it will restructure, including seeking a sale or merger.
The company stands to become the second major IT victim to the global economic downturn after Germany's Qimonda, which filed for bankruptcy protection last month. A memory chip glut sent prices down over a year and a half ago, sending many chip makers into the red. The economic downturn has exacerbated their problems by hurting demand and making loans harder to come by.
Bertrand Cambou, president and CEO of Spansion since the flash maker was created in early 2006, quit his posts and resigned from Spansion's board of directors, the company said in a statement. He agreed to provide consulting services to the company.
Spansion started as a joint venture between microprocessor maker Advanced Micro Devices (AMD) and Fujitsu. In 2005, AMD announced a plan to offer stock publicly in Spansion and seek to spin off the business because flash memory was a lower margin operation than its main microprocessor business.
Boaz Eitan, an executive vice president, has been named interim president of Spansion.
Eitan may not have much time to find a solution for Spansion's problems.
Last month, the flash memory maker said it would delay interest payments due Jan. 15 on bonds that mature in 2016, citing a 30-day grace period in making the payments. The company's inability to meet the payment sparked fears it may be next big chip maker to file for protection from creditors.
"With the meltdown in electronics demand in (the fourth quarter) and uncertain economic environment, Spansion is going to have a difficult time closing any 'strategic alternatives'," Gregory Wong, president of consulting and market research company Forward Insights, wrote last week.
Wong said Spansion may have to file for Chapter 11 before the grace period is up, which would be the second week of February.