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AMD, Fujitsu merge on flash memory

AMD and Fujitsu officially embark on a new joint venture for their flash-memory products. Plans for the new company, FASL, were first announced in March.

Advanced Micro Devices and Fujitsu are putting a new mark on flash memory.

The companies on Monday officially launched a joint venture designed to consolidate their flash-memory operations under one roof and market their products under a single brand, dubbed Spansion.

The new company, FASL LLC, will exist only to market flash. Flash-memory chips are used to store data in a wide range of electronic devices, including cellular phones and personal digital assistants.

FASL represents the culmination of a 10-year relationship between the two companies, which have collaborated on flash since 1993. AMD and Fujitsu created the joint venture mainly to streamline product development and to cut expenses in the face of the market downturn, the companies said. AMD and Fujitsu first announced their plans to create the joint venture in March.

Despite sharing chip development and manufacturing, the two companies had maintained competing sales forces, which analysts say often undercut each other on price. They also operated under a strict set of rules that limited where each company could sell products.

AMD has also suggested that FASL could offer different varieties of flash, opening up new market segments for the companies.

FASL aims to come into the market as a formidable competitor, with 7,000 employees, two manufacturing plants--including AMD's Austin, Texas-based Fab 25--and chip technologies from both AMD and Fujitsu.

"We plan to make Spansion flash memory the pre-eminent brand in the memory market," Bertrand Cambou, FASL's CEO, said in a statement. "The Spansion brand symbolizes new horizons and possibilities for our customers, helping them to create products with greater value and differentiation. We expect that the combination of our focus on customers, next-generation technology, process design and integrated manufacturing will help us emerge as the global flash memory leader."

FASL's main competitor will likely be Intel, which markets a variety of flash products.

The flash-memory market has been hit hard by the economic slowdown. But sales of the memory have begun slowly recovering, improving slightly over the past several quarters.

AMD will own 60 percent of the new company and will continue to report flash-memory sales as part of its own quarterly financial results. Fujitsu will own 40 percent of the company, which will be headquartered in Sunnyvale, Calif.