AMD to create a new company?
After the restructuring its flash memory division in December 2002, AMD seems to intend to separate it out as an independent company.
AMD shares grew almost 25% last week after Tim Mahon, analyst, had informed the company was to evolve assets for a new flash memory maker to be a joint venture of AMD and Fujitsu. The new enterprise will be named Fujitsu AMD Semiconductor Limited (FASL).
In Q4 last year almost a one third of AMD revenues was earned from flash memory (sales grew by 15% comparing to Q3 2002 and by 11% against Q4 2001). Eric Ross, analyst for Investec, reported that dividing processor and flash memory businesses will make AMD a better rival in both markets.
As for the new company – FASL – AMD and Fujitsu will own it equally, though Mahon supposes AMD might still control 60% of FASL.
Anyway, flash memory production will ensure AMD revenues in times of low processor sales.
Source: CNN Money
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