Spansion LLC, the flash memory venture of AMD and Fujitsu Limited, and Taiwan Semiconductor Manufacturing Company announced a manufacturing agreement under which TSMC will manufacture certain MirrorBit technology-based products using 110nm process technology.

Pursuant to the agreement, TSMC will supply foundry manufacturing capabilities for Spansion’s family of GL, PL and WS wireless products and GL embedded products based on 110nm MirrorBit technology.

TSMC will phase Spansion’s 110nm process technologies into its production lines exclusively for use in Spansion’s products. Initially, Spansion’s 110nm MirrorBit technology will be fabricated on 200mm wafers. The target production ramp date at TSMC is the second quarter of 2006.

“Our partnership with TSMC will help augment our internal production capability and allow us to more quickly migrate to next-generation technologies,” Bertrand Cambou, president and CEO of Spansion. “Together, we believe we can create a powerful team to compete in the Flash memory market, one of the fastest growing segments of the semiconductor industry. Our collaboration will also give us additional flexibility in our business model as we continue to meet customer demand for our MirrorBit technology.”

AMD constantly loses money on its flash memory division. During the most recent quarter AMD Memory Products Group generated sales of $462 million, down 31% from the second quarter of 2004 and up 3% from $447 million in the first quarter or 2005. Memory Products Group incurred an operating loss of $90 million, as compared to an operating loss of $110 million in the first quarter of 2005.