Spansion Inc. (CODE)

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Elpida Buys Spansion Flash Technology, Milan Facility (Update2)
March 03, 2010, 9:47 PM EST
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By Yoshinori Eki and Pavel Alpeyev

March 4 (Bloomberg) -- Elpida Memory Inc., Japan’s biggest maker of memory to store data in computers, said it may develop semiconductors for use in mobile phones by buying flash-chip technology assets from bankrupt Spansion Inc.

The purchase includes the U.S. chipmaker’s research and development facility in Milan, Italy, and intellectual property rights, Tokyo-based Elpida spokesman Hiroshi Tsuboi said by phone today. The company will research semiconductors that combine Spansion’s technologies with its own, Tsuboi said, declining to comment on manufacturing plans.

Elpida is looking to reduce its reliance on computer memory after a glut of the chips resulted in nine consecutive quarterly losses at the company. Developing new chips may provide another revenue source for the company, said Yuichi Ishida, an analyst at Mizuho Investors Securities.

“If they can successfully develop and mass-produce such compound memory, it would give them a competitive edge against their rivals,” Ishida said by phone from Tokyo. He rates Elpida’s stock “neutral plus.”

Sunnyvale, California-based Spansion, which hasn’t reported a profit since its spinoff from Advanced Micro Devices Inc. in 2005, filed for bankruptcy protection in March 2009. The company’s Japanese unit, which operates a 300 millimeter line making NOR flash for mobile phones, sought protection under the Corporate Reorganization Law of Japan in February 2009.

Elpida gained 2.2 percent to 1,654 yen as of the 11 a.m. trading break on the Tokyo Stock Exchange, while the benchmark Nikkei 225 Stock Average was little changed. The shares almost tripled in value last year. Spansion closed unchanged at 7.6 cents in Nasdaq Stock Market trading yesterday.

The purchase price may be as much as 5 billion yen ($57 million), the Nikkei newspaper reported earlier. The acquisition was “much less” than the reported figure, Tsuboi said.

--With assistance from Jason Clenfield in Tokyo. Editors: Jonathan Annells, Mark McCord

To contact the reporter on this story: Pavel Alpeyev in Tokyo at [e-mail]; Yoshinori Eki in Tokyo at [e-mail]