When flash memory maker Spansion finally goes public, trading under the ticker symbol SPSN, it will mark the third stage of its evolution from joint venture between chip maker Advanced Micro Devices
Flash memory, the sort that you find in digital cameras, cell phones, and PDAs, has been a hot, growing segment of the overall memory market. Apple's
Yet not all flash memory is made alike. NAND flash is a low-cost memory option permitting larger amounts of storage, as well as faster write and erase times, which explains why Apple prefers it for its devices. NOR memory, on the other hand, reliably stores small amounts of executable code that can be accessed quickly and is used in mobile phones and PDAs.
Until recently, NOR was the dominant form of flash memory, accounting for more than 58% of sales in 2004, according to industry research group iSuppli. For the first six months of 2005, however, NAND flash overtook NOR and accounted for nearly 54% of flash memory sales. NAND is expected to grow 40% in 2005 and then at a compounded rate of 13% each year until 2009. Meanwhile NOR sales are anticipated to decline by 16% this year and grow at a compound rate of 4% annually.
In its share registration forms filed with the SEC, Spansion reported that it lost $128 million in 2003, $19 million in 2004, and $257 million through the first nine months of 2005. In the latest filing, it did not disclose the fourth-quarter loss that it anticipates, noting only that it cannot operate at full capacity because of testing equipment constraints it was seeking to address. Further, because of the glut of flash chips, Spansion has witnessed a 3% drop in the average selling price for its memory.
Spansion's not alone in trying to exploit the need for flash memory. Intel
Spansion is not so lucky and will have to contend with more competition, greater supply, and lower prices. It's no flash in the pan, to be sure, but with industry conditions as they are, one wonders how long it will be before it actually comes to market.
If memory serves correctly, you can read more about Spansion in these related Foolish articles:
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Fool contributor Rich Duprey owns shares of FormFactor. He recommended the company to Hidden Gems subscribers. Rich does not own any of the other stocks mentioned in this article. The Motley Fool has a disclosure policy.