Spansion files for bankruptcy

California, March 2: Spansion Inc (NASDAQ: SPSN), the leading company in the business of flash memory products has sought bankruptcy protection from its creditors.

The Chapter 11 petition, filed in U.S. Bankruptcy Court in Delaware, has left many of its former employees fuming.

The Sunnyvale, California, based company had laid off 3,000 of its work force last week.

John Kispert, who replaced retiring Chief Executive Bertrand Cambou a month back, admitted that opting for Chapter 11 was a difficult decision. He, however, said that the semiconductors giant would persist in its endeavor to explore prospects for a tactical deal, which will enable it to maximize value for all the stakeholders.

Kispert said, "Given our focus on Spansion's future, management and the board have concluded that chapter 11 provides the most effective means for Spansion to preserve its business, meet its post-petition obligations and maintain customer confidence and continuity while we complete this restructuring."

Founded in 1993, Spansion is a joint venture between chip-maker Advanced Micro Devices Inc. and Fujitsu Ltd. It is the world's largest manufacturers of chips used in digital cameras, cell phones and high-definition televisions.

The weak global economy has led to a decline in the demand for flash and chip-based memory as the overall demand for electronics has plummeted.

The besieged chip maker lost $263 million in 2007 and $133 million in the third quarter of last year. Spansion has declared earlier this year that it had failed to pay the interest on some of its debt. Kispert had announced that "we're in very deep and active discussions" for either a merger or a sell off.

Kispert had alluded that Spansion might continue on its own after the restructuring attempt entails a bankruptcy protection. He had assured all the stakeholders, "It (Spansion) has tremendous technology, tremendous people and a tremendous reputation in the markets."