Although business is brisk, the memory subsidiary will sustain an operating loss in AMD's fourth quarter, the Sunnyvale, Calif.-based chipmaker said in a U.S. Securities and Exchange Commission filing. It did not specify how much of a loss Spansion, a joint venture between AMD and Fujitsu, would incur.
AMD blamed the problem primarily on hitches in the testing process that prevent it from running its manufacturing facilities at full stretch.
"Spansion's fabrication facilities are not operating at full capacity, due in part to constraints in Spansion's testing capacity for some of the flash memory products ordered by customers during the quarter," it said in its filing.
The chipmaker said the memory company was addressing its need for additional testing equipment.
AMD said it has seen a 15 percent increase in unit shipments, including its MirrorBit flash memory products. However, it has also seen a 3 percent decrease in average selling prices for flash memory.
Spansion makes flash memory for electronic products. It is widely used to store code in devices such as USB flash drives, MP3 players, digital cameras and mobile phones.
The memory company is working on closing its anticipated initial public offering and recently increased the number of Class A shares it will release to 39.2 million, up from its previous estimate of 35.3 million. Analysts estimate that Spansion's Class A shares will sell for between $16 and $18 apiece.
If its IPO is successful, Spansion's stock will be listed on the Nasdaq under the ticker symbol "SPSN."
However, the company is trying to weather tough times.
According to SEC filings, Spansion lost $128 million in fiscal 2003, $19.7 million in fiscal 2004 and $108.8 million in the first quarter of fiscal 2005.
For the quarter that ended in July, it posted an operating loss of $90 million.
The recent spate of financial losses and a drop in market share have made Spansion .
Discuss: IPO-bound Spansion set to report loss
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