Advanced Micro Devices Inc (AMD)

[kpf]

alan

The problem Spansion has is they have some older factories that it appears they have no plan, or method, to upgrade to more modern facilities. They will run them until they die at the older generations. They will be a fairly big drag on margins until they finally shut them down. The last time AMD shut down a factory they took good sized hit to earnings.

In fact, it appears that upgrading JV1 or JV2 just would not make sense, so I dont expect such plans. Anyway, I would assume as well JV1 will reach EOL next year or so. However, charges for Fab-closures are mainly related to severance payments for employees. Looking at the facilities in Aizu-Wakamatsu there is an obvious plan/method to avoid this; i.e by gradually moving employees from JV1 to JV3's expanding capacities, which is just next door. JV2s life is extended by means of mirrorbit.

Essence: No big charges looming, let alone drag on margins.

K.