Leadership in a Downturn

Posted on October 27, 2011 by John Kispert

As macroeconomic challenges continue to impact the semiconductor industry, I am reminded of the lessons learned from prior semiconductor downturns. In particular, three important lessons underscore a company’s ability to successfully manage industry cyclicality and weather the storm:

Even in a downturn, successful companies deliver highly innovative, differentiated products that enable profitable market share growth
Leading in a downturn requires perseverance and the ability to realign the company as needed to position for long-term growth
Successful companies must proactively drive a corporate culture with highly accountable and collaborative leaders to guide the company forward

Today, we announced our Q3 financial results. Despite the macroeconomic challenges, we executed against our revised guidance and achieved non-GAAP earnings per share of 48 cents, non-GAAP adjusted net income of $30.3 million and Q3 revenues of $258 million. However, we were not immune to the challenges facing the semiconductor industry. In consumer applications we experienced declines due to weak global demand. Our more mature wireless business was also significantly impacted due to a product transition made by chipset suppliers. The rest of our segments performed pretty well and we had strong design win momentum with our 400 new design wins.

In order to manage through continuing economic challenges and position the company for the future, we are executing on these three principles.

Deliver innovative, differentiated products that enable profitable market share growth

In order to execute to our strategy to drive profitable market share growth, two years ago we decided to place greater emphasis on high performance products and embedded segments where we can differentiate and achieve a greater return on investment.

We plan to integrate the wireless business into our embedded segment, which already includes wireless applications and infrastructure, while ensuring that our wireless customers continue to receive a high level of support. Our embedded business strategy remains sound. We believe we have a differentiated portfolio well aligned with the needs of embedded customers.

Our proprietary MirrorBit® technology and new class of 65nm products are delivering advanced performance and enabling our customers to create differentiated electronics and an improved user experience. Over the past year, we have introduced several innovative new products, including the

Spansion GL-S family, the highest speed serial NOR products, the Spansion FL-S family, the highest density 4Gb parallel NOR products and new flash file software, the Spansion® FFS™ Flash File System. We have recently completed our first 45nm silicon with our manufacturing partner, SMIC, with positive results, which will allow us to continue to provide customers with high density and cost-effective products in the future. And we are making progress with our NAND products, which we will sample in the first half of 2012 with production in the second half of next year.

Leading in a downturn requires perseverance and the ability to realign the company as needed to position for long-term growth

Fundamental to weathering downturns and navigating through global economic weakness is taking proactive steps to ensure a business is sustainable through the downturn and poised for growth coming out of it. To that end, we are taking actions to improve our manufacturing efficiencies, align the company with current market demand and position the company for future growth. For example, today we announced the consolidation of our test and assembly facilities with plans to transition production from our Kuala Lumpur facility to our Bangkok facility by the end of Q1 2012. This transition is expected to result in a reduction of our global workforce by about 20 percent, primarily due to closing of the Kuala Lumpur facility and about 5 % outside of Kuala Lumpur. We recognize and acknowledge that the site consolidations will affect the personal lives and families of our employees and we do not take this lightly. We are offering competitive severance packages and resources to help them in their career transition.

Our employees have done an outstanding job and we are extremely thankful for their contributions. However, the unfortunate reality of the current macroeconomic situation requires Spansion to realign the company and focus on operational efficiencies.

Successful companies must proactively drive a corporate culture with highly accountable and collaborative leaders to guide the company forward

In times like these, building a strong collaborative culture is more important than ever. It starts with the leadership team. During times of uncertainty and inevitable change, employees look to the leadership team to guide them through the challenging times. We believe it is important to emphasize and live our values (accountability, determination, flexibility, integrity, smart innovation and winning together) throughout all our interactions and energize our people to innovate, execute and do great work for our customers. These are areas we will continue to prioritize, improve and evaluate progress.

I am optimistic about our future and we remain focused on executing our well-defined strategy. We are committed to delivering the best service and highest quality products to our customers, and through this will be agile and aggressive in creating value for all of our stakeholders.

Technology is Racing Inside the Car

Posted on October 24, 2011 by Fely Krewell

Time flies. I can’t believe it is almost the end of the year already. For many, that means the shock of holiday shopping starts to set in, but for me, it is time to start watching the parade of announcements from the automakers as they roll out new models and announce their latest technology breakthroughs. TV commercials, magazines, social media and of course, the car shows, will all be a buzz about the newest must-have features and 2012 models.

I work closely with many of the major auto companies in my role at Spansion so I get to see what’s coming before most. Some of the trends that you will hear a lot more about over the coming months are advanced applications of Bluetooth, cloud-connected electronics and advanced safety systems.

I personally am most excited with what’s happening behind the steering wheel. The dashboard is undergoing a major upgrade. Your classic speedometer, odometer, warning signals, known as the instrument cluster, is moving to TFT (thin film transistor) displays. The mechanical gauges are going digital. We’ve already seen the change in some luxury cars but it is making its way into mainstream vehicles.

Riding the Smartphone and Tablet Wave

Thanks to the proliferation of smart phones and tablets, the price of TFT displays has dropped significantly over the last couple years. The affordability of displays has allowed the automakers to use them more widely within the car and throughout their product line. It is no longer a luxury for the auto elite.

I’m excited about TFTs, not because of the “cool factor,” but for safety. The screen will provide important data to enable safer and smarter driving. The information will be the most relevant data depending on the driving environment or health status of the car. It will be a smart display that knows what to tell you and when. It will have to support rich graphics, 3D imagery, multi-languages, and even high resolution video.

Bringing High Technology Mainstream

Advances in automotive electronics will make the roads a safer place, but only to the degree the technology proliferates throughout all car segments. Collectively the industry needs to optimize systems to make it affordable.

Spansion is doing its part by focusing on the memory subsystem with our chipset partners. Our newly announced Spansion® FL-S family is great example of this. We are using the low pin count serial interface to strip out complexity in the printed circuit board, simplifying the connections to the microcontroller. And by delivering a high-performance double data rate serial Flash memory that is capable of 66 MB/s reads, automotive designers can simplify designs further by removing DRAM altogether in the TFT display and execute and render graphics directly from the Spansion FL-S memory.

It is innovation like this that is needed to advance the start of the art, affordably, so it can reach the masses. I’m very excited to see the new crop of cars that are coming in 2012 and the coming years.

The LA Auto Show is right around the corner, November 18-27. All of the latest advancements and a look into the future will be on display. I’ll be watching all the excitement and will share my thoughts with you after the event.

Set Top Box: The Center of Your Viewing World

Posted on October 13, 2011 by Susie Gao

The Set Top Box (STB) is the center of your viewing world delivering premium content and services to you through a variety of broadcasting mediums (Satellite, Cable, Terrestrial, IP). Consumers are demanding media-rich home entertainment requiring STB evolution to include more advanced features and services and driving an architecture for faster performance, scalability and security.

More than just ABC/CBS/NBC with a Remote

In a Digital TV (DTV) system, a Set Top Box receives, filters and processes all the content and services accessed by the TV viewer. Evolving from a simple Standard Definition device that offered a basic Electronic Program Guide (EPG) information and access to a limited set of services and content, newer STBs support:

High definition channels
Multi-tuner capabilities (enabling simultaneous viewing and recording)
IPTV in addition to broadcast TV
Pay per view/video on demand services
Internet interactivity

STBs are also increasingly assuming the functions of home gateway or home server devices that can store as well as distribute content to many TVs, PCs and portable devices throughout different rooms inside the home.

Give me Access to that Content

Increasingly, consumers want access to the content on their terms: on-demand and on this device. While everyone would love to get the content for free, normally access comes at a cost. Consequently, both the consumer and the pay-TV operator must rely on the STB to be the platform for secure transactions and content protection.

For consumers wanting privacy and content providers wanting to protect their revenue stream, security within the STB is critical and falls in two areas:

Conditional access systems (CAS) – Securing the content as it is delivered from the operator to the STB by ensuring that consumers can only play content to which they are entitled. The overall user entitlement process is handled by the conditional access kernel (CAK) and a conditional access module – often contained in a SmartCard- inside the STB.
DRM (digital rights management) – Protecting the content as it is stored in the STB or shared with other devices and users through a home network such as WiFi. The DRM technology is typically handled by the middleware software and therefore needs to be secured from hacking as well.

NOR flash provides a key role

NOR Flash contains the boot code, CA kernel, operating system kernel, device drivers, middleware and the EPG. The boot code and the operating system code require high random read performance and data retention making NOR flash the ideal non-volatile memory solution, directly impact the viewing experience by providing a near “Instant On” experience so they can access their desired programs quickly. Unlike other consumer electronic systems, TV operators actively manage the STB once it has been supplied to the consumer. Higher-density NOR flash memory can be provisioned for future software additions or upgrades.

In providing security in the STB, NOR Flash is particularly important. To secure the CA kernel, the OS and the middleware codes, the NOR flash contains security features such as permanent lockable region to protect against write or erase access by hackers and pirates and a One Time Programmable (OTP) region for sensitive data such as encryption keys and unique IDs.

Spansion’s 65nm NOR products Family offer features that address the STB’s performance, scalability, performance and total cost of ownership. The Spansion® GL-S family is the latest generation of Parallel NOR products that have been well established in the STB market for many years, and Spansion Serial NOR products have ramped up quickly in STB applications since 2010 because of its reduced pin count which simplifies board layout and results in lower system costs and reduces the form factor of many embedded designs. The latest generation of Serial flash, Spansion FL-S family, brings high performance benefits to simplified memory interface.

Infographic: The Evolution of SPI Flash Memory

Posted on October 6, 2011 by Mark Franken

The Spansion® FL-S NOR Flash memory family has over 20% faster double data rate (DDR) read speeds and three times the programming speed over competing serial Flash solutions. The Spansion FL-S delivers leading performance, automotive grade temperature ranges and in some applications, eliminates the need for DRAM.

Read the infographic below to learn about the evolution of serial Flash memory. (Click the image to expand.)

Introducing Spansion® FL-S SPI family: Your New Four-Lane Superhighway

Posted on October 3, 2011 by Ajay Bhatia

You’ll get no arguments from me. I love driving my car on an open, six-lane superhighway. With speed limits in the US of upwards of 80MPH, you can quickly get from point A to point B. However, that huge superhighway comes with a cost; it takes up a lot of real estate, it is costly to build, and it is sometimes overkill for the job at hand. Sometimes, a smaller superhighway is simply perfect as the solution.

In the world of NOR Flash memory, Parallel NOR has quite effectively provided the “six-lane superhighway” for embedded system applications, with quick data delivery to and from the memory and the microcontroller (MCU). In contrast, NOR solutions using the Serial Peripheral Interface (SPI) have been more akin to a dirt road. However, with new innovations in DDR SPI, Spansion has transformed SPI NOR into a four-lane superhighway and increased the speed limit substantially.

Parallel vs. Serial Bus Architectures

System developers must make design choices between parallel bus architecture for more bandwidth and serial bus architecture for lower pin count. While the performance of Parallel NOR is still required for many applications, each I/O pin at the CPU and memory interface adds to the overall system cost. As a result, some hardware system designs are migrating to alternate complex code execution models with optimized pin count solutions.

Regardless of Parallel or Serial, the ultimate NOR advantage is real-time code execution for an enhanced end-user experience. This implies a suitability toward high read bandwidth and low data access latency. One of the increasing advantages of SPI is the growing number of chipsets and microcontrollers that support the interface. Recently the market has moved to multi-input output (MIO) functionality to create x2 and x4 interfaces that provide high performance at an optimal system overhead.

Introducing Spansion® FL-S SPI family – 66MB/s, 1Gb of storage and only a 16-pin SIOC package

Our newly-released Spansion FL-S family leads the industry in performance with a 20% increase in read speed combined with a 3X boost in programming time. Moreover, the product line supports up to 1Gb for greater applicability in automotive instrument clusters, digital TVs, set-top boxes and industrial designs.

By implementing an innovative Double Data Rate (DDR) bus on a Serial interface, the SPI NOR read performance is increased up to 66 MB/s for faster execute in place (XiP) operation. All this functionality sits in an industry-standard 16-pin SO package with an active signal count of 6 pins. This provides a throughput of 11MB /s per active signal pin.

Speed improvements also translate into operational cost savings. A 1.5 MB/s programming speed reduces system cost and increases throughput by 300% over the nearest competing solution. Lastly, the new family has expanded security options to protect customer IP through a 1kB one-time programmable (OTP) region, individual sector protection, and advanced data protection.

Rich User Experiences with More Affordable Designs

By offering high performance and high density, SPI Flash can become the mainstream choice for low-power MCUs. Bypassing the need for any additional memory within the MCU, a system designer can expose the SPI Flash in the main memory map and treat it like on-chip Flash, maximizing performance and throughput.

Additionally, performance intensive LCD images can stream from the Flash and even raster directly– all from a very pin-efficient footprint provided by SPI NOR. And with a storage density of 1Gb, the system can scale to handle more comprehensive vector engines for realistic graphics.

With the competing pressures of increased functionality and performance at a lower system cost driving requirements in the embedded application space, architects and designers are forced to choose and establish trade-offs. Now, with the DDR SPI performance and 1Gb density scalability announced with the newly released Spansion FL-S family, SPI Flash may have just become your new four-lane superhighway.