Path to manufacturing alliance success paved with shared intentions

by Debra Vogler, Senior Technical Editor

Flash memory manufacturer Spansion is the outgrowth of the successful AMD/Fujitsu joint venture, so Spansion EVP & COO James Doran brought solid experience to bear on the topic explored at Monday’s ConFab session on how to manage successful manufacturing alliances. “Manufacturing alliances work best when each partner provides something the other partner needs, and both partners, together, benefit from the outcome,” Doran said, adding that the greater the degree of dependence each alliance partner has on the result of the alliance, the greater is the likelihood of success.

“None of the companies in an alliance will be successful unless all involved have ‘skin in the game,'” Doran explained. “I think the more you can evolve that over time — and reach a point where the relationship is open, there’s trust, people are contributing, and all realize they aren’t going to make it unless the alliance makes it — then you’ve got the key to a successful joint venture.”

Asked to comment on the tension between partners that can exist in the new process-lite/fab-lite world, where foundries tend to want captive customers and customers may lean toward having multiple sources, Doran pointed to the example of the joint venture (JV) between AMD and Fujitsu, that led to Spansion. (FASL LLC, formed in April 2003, replaced the two firms’ previous 50-50 JV, Fujitsu-AMD Semiconductor Ltd, and officially changed its corporate name to “Spansion LLC” in 2004 to leverage the name-branding of its memory devices.) One of the rules of engagement governing the Fujitsu-AMD manufacturing alliance for flash memory was that each company could only have their flash memory built within that alliance, explained Doran. “And frankly, I think that was one of the reasons it worked so well. We deliberately set it up so that we didn’t have any second source agreement,” he noted in an interview. — D.V.


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