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Spansion Sues Samsung in One of Technology Industry’s Largest Patent Infringement Suits

Tuesday, November 18, 2008

ITC and U.S. District Court cases could block importation of millions of the most popular mp3 players, cell phones and digital cameras

Sunnyvale, CA -- Spansion Inc., the world's leading pure-play provider of Flash memory solutions, today announced that it is filing two separate patent infringement complaints against Samsung with the International Trade Commission and in the U.S. District Court in Delaware. In one of the largest patent infringement claims ever filed, Spansion is seeking the exclusion from the U.S. market of well over one hundred million mp3 players, cell phones, digital cameras and other consumer electronic devices containing Samsung's infringing flash memory components. The complaint in the US District Court in Delaware also seeks an injunction and treble damages for patent violations relating to Samsung Flash memory, that Spansion estimates has accounted for more than $30 billion in Samsung's global revenues since 2003.

"Samsung's infringement of our intellectual property not only harms Spansion, but it threatens the foundation of technology innovation," said Dr. Boaz Eitan, executive vice president, Spansion, CEO of Saifun.

Flash memory, which retains data in devices when the power is turned off, is found in virtually all electronic devices and is one of the largest segments of the semiconductor industry, with nearly $130 billion in total revenues since 2000.

The Spansion patents named in these law suits are fundamental to floating gate technology, which is the foundation for approximately 90 percent of the Flash memory market. Spansion is also leading the industry with MirrorBit, a charge-trapping technology, that represents a growing share of the Flash memory market and is expected to replace floating gate technology in the future. Flash memory companies including Samsung have publicly announced their plans to transition to charge-trapping type technologies for their future generation products.

"Spansion has patents that are fundamental to Flash memory. Samsung itself has cited these patents many times in its own patent filings, underscoring industry acceptance of the fundamental nature of Spansion's IP," said Robert Melendres, executive vice president and General Counsel for Spansion. "Spansion will vigorously protect its intellectual property and is entitled to be compensated by Samsung for its use of our IP."

The acquisition of Saifun Semiconductor earlier this year expanded Spansion's IP portfolio and was a key milestone in Spansion's strategy to create a major licensing business, and generate new streams of significant revenue with very high margins.

"The combination of Spansion and Saifun's patent portfolio is the foundation for Spansion's transformation into a licensing leader," said Eitan. "As the industry transitions to charge-trapping technologies, Spansion is in a strong position to be the technology provider at the core of the future Flash memory market."

Although Samsung is the target of the litigations, Spansion is required to name the manufacturers of downstream products containing Samsung's infringing devices in its ITC complaint. Companies named in the ITC case include: Samsung, Apple, Asus, Kingston, Lenovo, PNY, RIM, Sony, Sony-Ericsson, Transcend, some of their subsidiaries and third party manufacturing companies.

With $2.5 billion in revenue in 2007, U.S.-based Spansion is now the third largest provider of Flash memory in the world, behind Korea-based Samsung and Japan-based Toshiba. A long-time technology innovator and one of only three major U.S. Flash memory suppliers, Spansion has invested approximately $2 billion in research and development and holds 3000 patents and patent applications.

About Spansion

Spansion (Nasdaq: SPSN - News) 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, selling and licensing Flash memory solutions. For more information, visit

Spansion, the Spansion logo, MirrorBit, MirrorBit Eclipse, ORNAND, ORNAND2, HD-SIM, Spansion EcoRAM and combinations thereof, are trademarks of Spansion LLC in the U.S. and other countries. Other names used are for informational purposes only and may be trademarks of their respective owners.

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 relating to Spansion's vigorous protection of its intellectual property, its entitlement to be compensated by Samsung, its strategy to create a major licensing business and generate new streams of significant revenue with very high margins, and its transformation into a licensing leader. 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 delays or losses in our lawsuits and other proceedings involving our intellectual property; the ability of our patents to protect our intellectual property and products, including the possible invalidation or limitation of our key patents; our ability to enforce our intellectual property rights, including due to changes in patent laws, regulation or enforcement; and general risks associated with litigation, including costs, diversion of management and key employees, adverse results, and consequences arising from naming certain of our customers in a lawsuit.

The company also 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 and the company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2008, which discuss other important risk factors that could contribute to differences between actual results and current expectations, including factors that could affect the company's business, results of operations and financial condition. The company assumes no obligation to update any forward-looking statements or information included in this press release.

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