However, the news reiterated to me that Spansion is playing Intel's own game of building 300mm fabs with leading-edge technology to be able to aggressively compete against rivals that have struggled to keep pace, while competitors are predominantly reliant on 200mm fabs.

The irony is that later this year Spansion will have started ramping its first 300mm fab while Intel remains 200mm fab dependent!

It doesn't stop there, either!

Spansion has done a deal with TSMC that includes 200mm capacity while 300mm capacity will start in 2Q07. So, by late this year, Spansion will have two 300mm fabs pumping out NOR flash, with its own fab doing the Quad technology chips to boot. By mid-2008 its 300mm fab in Japan will start the 45nm ramp.

The old 200mm fabs sold to Fujitsu will still fabricate legacy products on old technology under a foundry agreement, while that is still required. Spansion still has JV3 fab in Japan doing 110nm node devices. Coupled with Fab 25 in Texas, it all adds up to mean that the company has a rather large manufacturing base.

Intel has D2 in Santa Clara, Fab10/14 in Ireland, and Fab 18 in Israel doing NOR flash production, but also other legacy products.

The weaker manufacturer this time around is clearly Intel!

With Spansion's move to 300mm production I can't believe that Intel will not migrate NOR production to the larger wafer size by 2008. If it doesn't I would expect that division is definitely up for sale as any purchaser would see by then that only a massive investment in 300mm fabs will keep it competitive.

It is well known that Intel is working hard on making its NOR operations profitable once again and sees a bigger picture for NOR with its Joint Venture, IM Flash on the NAND side down the road, but holding off 300mm production for NOR just kills the business sooner rather than later.

Perhaps a 300mm fab in India would fit the bill?