AMD and Fujitsu to Form a New Flash Company

by Anton Shilov
03/31/2003 | 05:19 PM

AMD and Fujitsu Limited today announced they have executed a Memorandum of Understanding (MOU) to establish a new Flash memory semiconductor company headquartered in Sunnyvale, California. A Japan headquarters will be located in Tokyo. The new company, to be called FASL LLC, will be based on the integration of AMD and Fujitsu’s Flash memory businesses, including their existing joint manufacturing venture, Fujitsu AMD Semiconductor Limited. The new company is expected to begin operations in the third quarter of this year.

The MOU provides for:

• AMD to own a 60% interest in the new company and Fujitsu to own a 40% interest; the financial results will be consolidated in AMD’s financial statements
• Contributions of gross assets with a net book value in excess of $2.5 billion
• AMD to appoint the CEO of the company, Bertrand Cambou, AMD senior vice president, Memory Group
• Fujitsu to appoint the first chairman of the board, Masamichi Ogura, Fujitsu corporate senior vice president & group president, Electronic Devices Business Group
• A board of directors consisting of ten members, six appointed by AMD and four appointed by Fujitsu
• A marketing arrangement whereby the new company will sell Flash memory products through AMD and Fujitsu and their respective sales forces, under a product brand name to be announced by the start of operations of the new company
• An initial global workforce of approximately 7000.

AMD expects to contribute its:

• Flash memory group;
• Fab 25 in Austin, Texas;
• Research and development center known as the Submicron Development Center (SDC) in Sunnyvale, California;
• Final Flash memory assembly and test operations in Thailand, Malaysia, and China.

Fujitsu plans to contribute its:

• Flash memory business division;
• Fujitsu Microelectronics (Malaysia) (FMM) final assembly and test operations.

Fujitsu and AMD plan to jointly contribute:

• The ongoing 50-50 manufacturing joint venture Fujitsu AMD Semiconductor Limited (FASL) located in Aizu-Wakamatsu, Japan.

AMD and Fujitsu joint-venture will produce roughly 25% of the world’s flash memory production, the same amount as made by Intel Corporation. Higher market share provides the companies more opportunitirs to control the market and flash memory pricing.

In addition, AMD will be able to increase its revenues what should definitely please its investors.