90nm production of Spansion’s NOR flash devices using foundries such as TSMC is set to be reduced dramatically in the coming months as manufacturing efficiencies resulting in increased output at its Austin, Texas Fab25 (200mm) and SP1 (300mm) fab in Aizu-Wakamatsu, Japan are realized, the company said. 

The news has long been anticipated by semiconductor market observers as Spansion seeks the benefits of increased capacity in-house, coupled to higher utilization rates and die shrinks to reduce production costs in the highly competitive NOR flash market.

"Last year, Spansion committed to reducing dependencies on external foundry sources and streamlining our own manufacturing and test capabilities, with the ultimate goal being significant cost savings," said Bertrand Cambou, President and CEO, Spansion, Inc. "With the exceptional performance of our worldwide manufacturing and engineering
teams, we have met that challenge and are committed to continuing to prove our ability to lead in this highly competitive field."

The reduced reliance on foundry and subcontractors equates to savings of approximately $50 million per quarter in the first half of fiscal 2008 compared to the second half of fiscal 2007, the company said.

Foundry partners TSMC and SMIC will later be used for 65nm (300mm) production later in 2008.