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Oct 08, 2007 at 03:08 PM |
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Spansion's acquisition of Saifun has been spun as some kind of perfect partnership that will produce $ profits where Saifun failed on its own as an IP standalone entity.
In a conference call to discuss the buyout, executives noted that one of the attractions of the deal for Spansion going forward was that it wouldn’t have to pay royalties anymore, especially as it ramps quad NOR devices using Saifun’s IP.
Though both companies were quick to note that this over-simplistic view of the deal didn’t explain the far-reaching benefits that would help expand the adoption of the core charge-trapping technology, neither side really convinced anyone as to how and when such real benefits would be translated in profitable and meaningful earnings!
With the viability of the IP business model under scrutiny, the deal only reinforces the view that the standard model is broken.
Saifun investors may also be disappointed in the deal, which values the company at $368 million. This isn’t bad on the one hand, given that the quarterly revenues were below $20 million of late with previous license holders such as Qimonda and Macronix stopping development and therefore revenues for Saifun.
Qimonda parted company with Saifun exactly a year ago; Spansion is the only company to have picked up the slack. SMIC is still promising to enter production but the real revenues for Saifun were coming from Spansion.
But it wasn’t that long ago that Saifun was valued at approximately $1 billion, so in that sense Spansion hasn’t paid much!
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October 2007 
