AMD, Fujitsu to Form Flash Memory Company

Duo says new company will better respond to changes in demand for flash memory chips, used in cell phones and PDAs.

Advanced Micro Devices Inc. and Fujitsu Ltd., partners in flash memory development since 1993, are combining their respective flash memory businesses to create a new company.

In announcing a memorandum of understanding Monday, executives from both companies said the new business, which will be called FASL LLC and based in Sunnyvale, Calif., will boost their profile in the flash memory space, will speed up research and development initiatives and will increase the time to market for new products. Officials said that they expect the new company will be the number two player in the space behind Intel Corp.

The new company will also be more nimble and flexible to respond to changes in demand for flash memory chips, which are used in wireless products such as cell phones and PDAs.

"AMD and Fujitsu will contribute their entire flash memory businesses" to FASL, said AMD President and Chairman Hector Ruiz. The new business name is the acronym for the companies current joint manufacturing initiative, Fujitsu AMD Semiconductor Limited, based in Aizu-Wakamatsu, Japan.

Ruiz said the company, which will have a net value of more than $2.5 billion, is scheduled to be launched at the beginning of the third quarter. Bertrand Cambou, currently senior vice president of AMDs Memory Group, will be the companys first CEO. Masamichi Ogura, corporate senior vice president and group president for Fujitsus Electronic Devices Business Group, will be the first chairman of the 10-member board of directors, which will draw six members from AMD and four from Fujitsu.

AMD will own 60 percent of FASL, Fujitsu 40 percent. The two companies will be the sole distributors of products created by the new 7,000-employee business, and there are no plans to spin off the business, officials said.

According to the companies, AMD, of Sunnyvale, Calif., will also contribute its Fab 25, in Austin, Texas; a research and development facility known as the Submicron Development Center, in Sunnyvale; and assembly and test operations in Thailand, Malaysia and China.

Fujitsu will contribute test and assembly operations in Malaysia.

Latest Stories by Jeffrey Burt