With the flash memory market plagued by a capacity glut and falling prices, memory suppliers have undergone rough sledding in recent months, Spansion being no exception. Analysts have called for AMD to focus on its growing microprocessor business by withdrawing its stake in the venture. AMD owns 60 percent of Spansion.
Spansion's main nemesis has been Intel, which analysts say has been aggressively cutting flash memory prices.
Unloading Spansion would appear to make strategic sense for AMD, given how the memory company has dragged down AMD's earnings.
In its March 2005 quarter, AMD posted a net loss of $17 million, or 4 cents per share, on sales of $1.23 billion, which the company attributed to severe pricing erosion in its memory products.
Spansion manufactures NOR flash memory, a key component of mobile phone handsets. However, the technology is increasingly threatened by NAND flash. The company's fiscal 2004 sales were roughly $2.3 billion.