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This letter is in response to an article entitled, "Samsung did not surpass Intel in flash, says Semico." The article was posted this week (see November 22 story). In this letter, Semico Research Corp. wants to clarify--or retract--its position on market share for Spansion, the joint flash-memory venture between Advanced Micro Devices Inc. and Fujitsu Ltd.
We have been informed by our friends at Spansion that the Semico Spin piece: "Big Changes in Flash Market Share?" was based upon a faulty understanding of the way their company deals with AMD and Fujitsu. In the article we stated that market shares for 2003 would be computed separately for Spansion, Fujitsu, and AMD because AMD-marked parts would be available only through AMD and Fujitsu parts only from Fujitsu. We have learned that this is not the case, and that both AMD and Fujitsu are free to sell all three brands of parts: AMD, Fujitsu, and Spansion.
This casts a completely different light on the market share division, since all parts emanate from Spansion as products rather than as parts exclusively made under a foundry relationship for either AMD or Fujitsu. Although we stated that the three brands will be reported separately, according to the standard rules mentioned in the piece we now see that they need to be reported together as Spansion brand product. Furthermore, since any consolidation or divestiture is reported as if it were in effect for the entire year in which it happened, Semico will show Spansion revenues to be combined even for the time between January 1 and when the Spansion brand was introduced.
As for the question about market share, Semico has not yet compiled 2003 market share, and we can only report what has been shared by the companies. Spansion (as reported through AMD's financials) had Q3 revenues of $420 million, which representatives tell us can be adjusted up to $440 million once we account for Fujitsu's markup. Intel's Wireless Communications and Computing Group's reported revenues for Q3 were $450 million, a number which will be split into two parts: Intel's flash revenues, and that group's processor revenues. Recall that Intel sells their RISC embedded processors out of that group. Semico has not yet divided out the group's processor revenues, but it looks as if the two companies' flash sales are certainly close to each other, and in this light it is quite possible that Spansion's third-quarter revenues surpassed those of Intel.
Jim Handy, Director Nonvolatile Memory Services