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Spansion and IBM Sign Cross Licensing Agreement | Cypress Semiconductor

Spansion and IBM Sign Cross Licensing Agreement

Last Updated: April 28, 2008

SUNNYVALE, Calif., April 28, 2008 -- Spansion Inc. (Nasdaq: SPSN), the world's largest pure-play provider of Flash memory solutions today announced it has entered into a seven-year patent cross licensing agreement with IBM.

For 15 consecutive years, IBM has been issued more United States patents than any company in the world, which patents include memory solutions. Recently IBM announced a next generation technology code-named Racetrack, which is an electronic memory solution that combines the best attributes of Flash drives (common in digital cameras and cell phones) and the hard disk drives of computers. The breakthrough could lead to cheaper, more durable electronic devices that would hold far more data in the same amount of space and boot up more quickly.

"We are greatly impressed with IBM's relentless commitment to invest in disruptive technology, as well as the breadth and depth of their patent portfolio," said Dr. Louis Parrillo, executive vice president, Research and Development for Spansion. "We believe entering into this patent cross license agreement with IBM gives us access to some of the most advanced technology in the world, providing Spansion the opportunity to further its leadership in Flash memory design, manufacturing and overall innovation."

Included in Spansion's patent portfolio are patents relating to its MirrorBit(R) technology, a charge-trapping technology that is believed by Spansion to be the most likely successor to floating gate technology for scaling Flash memory to sub-45nm process lithography nodes. Spansion is the only company in the world to have committed all leading-edge Flash memory production to charge-trapping technology, and sales of products based on MirrorBit technology are on-track to reach $2B in 2008. Spansion believes its investment in MirrorBit technology gives it a strong charge-trapping patent portfolio in process, design and manufacturing technologies.

Spansion and IBM will also partner on the continued development of Flash memory solutions for the Chinese market. Spansion has been committed to working with the top consumer electronics OEMs and wireless handset manufacturers in the Greater China region, where it boasts a final manufacturing facility in Suzhou, design centers in Suzhou and Beijing and sales and marketing offices in Beijing, Shanghai and Shenzhen, employing over 1,300 employees in those locations.

"As the memory market continues to evolve, both technically and economically, IBM continues to do advanced research on new storage and memory technologies," said Tom Reeves, VP Business Development, IBM Technology and Intellectual Property. "IBM is open to forming new partnerships for the development and commercialization of such technologies."

About Spansion

Spansion is a leading Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated

exclusively to designing, developing, manufacturing, marketing and selling Flash memory solutions. For more information, visit http://www.spansion.com.

Cautionary Statement

This release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the belief that Racetrack could lead to cheaper, more durable electronic devices that would hold far more data in the same amount of space and boot up more quickly, the belief entering into the patent cross license agreement with IBM gives Spansion access to some of the most advanced technology in the world and the opportunity to further its leadership in Flash memory design, manufacturing and overall innovation, the belief that MirrorBit technology will be the most likely successor to floating gate technology for scaling Flash memory to sub-45nm process lithography nodes and that sales of products based on MirrorBit technology will reach $2 billion in 2008, the belief that Spansion's investment in MirrorBit technology gives it a strong charge-trapping patent portfolio in process, design and manufacturing technologies, the expectation that Spansion and IBM will partner on the continued development of Flash memory solutions for the Chinese market. Investors are cautioned that the forward-looking statements in this release involve risks and uncertainties that could cause actual results to differ materially from the company's current expectations. Risks that the company considers to be the important factors that could cause actual results to differ materially from those set forth in the forward-looking statements include the possibility that demand for the company's Flash memory products will be lower than currently expected; that average selling prices may decline; loss of key intellectual property arrangements creates a greatly increased risk of patent or other intellectual property infringement claims; the high cyclicality of the Flash memory market which has experienced severe downturns; that Spansion may not be effective in expense reduction efforts; the merger with Saifun may not result in benefits that Spansion anticipates as a result of integration or other challenges; that political, economic and military conditions in Israel may adversely affect Saifun's and Spansion's business; the acquisition of Saifun may result in a loss of Saifun's licensees or Spansion's customers; that Spansion may not realize the expected value of Saifun's NROM technology; that OEMs will increasingly choose NAND-based Flash memory products over the company's MirrorBit architecture-based Flash memory products for their applications; that the company has a significant amount of debt, and such debt could subject us to restrictive covenants; that the company may not achieve facilities and capacity implementation schedules as a result of factors such as insufficient cash flows and unavailable external financing; that the company may lose a key customer, or experience a reduction of demand from a key customer; that the company will not successfully develop, introduce and commercialize new products and technologies or to accelerate our product development cycle; that competitors may introduce new memory or other technologies that may make our Flash memory products uncompetitive or obsolete; that the company may fail to successfully develop next generation products; that the company may experience manufacturing constraints or fail to achieve manufacturing efficiencies; customers' ability to change booked orders may lead to excess inventory; that the company's investments in research and development may not lead to timely improvements in technology; and intellectual property claims or litigation could cause the company to incur substantial costs or pay substantial damages or prohibit sales of its products. The company urges investors to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the company's Annual Report on Form 10-K for the fiscal year ended December 30, 2007. The company assumes no obligation to update any forward-looking statements or information included in this press release.

Spansion(R), the Spansion Logo(R) , MirrorBit(R), MirrorBit(R) Eclipse(TM), ORNAND(TM), ORNAND2(TM), HD-SIM(TM) and combinations thereof, are trademarks of Spansion LLC. Spansion, the Spansion Logo and MirrorBit are registered in the US and other countries. Other names used are for informational purposes only and may be trademarks of their respective owners.

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