Creating what it hopes will be a formidable force in the worldwide flash memory chip market, Advanced Micro Devices (AMD) has agreed to form a new company with Fujitsu that will include both companies' entire flash memory operations.
Called FASL, the new company would help AMD and Fujitsu "achieve leadership in the flash memory market," AMD's chief executive officer, Hector Ruiz, said.
AMD will hold a 60 per cent stake in the new joint venture, with Fujitsu taking 40 per cent.
Ruiz said that AMD expected to be "a strong number two player" in the market.
Intel was the market leader in flash memory production, analysts said.
The partnership would allow the companies to support their development of flash memory chips with joint sales and marketing efforts, Ruiz said.
FASL would have dedicated resources to develop, manufacture and market its flash memory products for use in mobile phones, handheld computers, set-top boxes and other products, he said.
The new company would have 7000 employees and would be headed by AMD senior vice-president, Bertrand Cambou.
It will have its worldwide headquarters in Sunnyvale, California, where AMD is based, and a separate Japanese headquarters in Tokyo, the home of Fujitsu.
FASL planned to begin operating in the third fiscal quarter of 2003 once it had obtained regulatory approvals, Ruiz said.
There were "no plans to spin off the company".
AMD and Fujitsu would be the sole distributors of the flash memory chips produced by FASL, Ruiz said. AMD would distribute the products in the US and Europe while Fujitsu would distribute the chips in Japan. Distribution in the rest of Asia was split between the two companies.
The companies would contribute assets with a net book value of $US2.5 billion to the new venture, he said.
AMD would contribute its entire flash memory group, its fab in Austin, Texas, its Submicron Development Centre in Sunnyvale and its flash memory and test operations in Thailand, Malaysia and China. Fujitsu grought its entire flash memory division and an assembly and test facility in Malaysia.
An existing joint venture between the two companies, Fujitsu-AMD Semiconductor Ltd., would also be transferred to FASL.