Spansion Extends SMIC Agreement to Include 43nm MirrorBit(R) ORNAND2(TM) Technology

SMIC to Produce Differentiated MirrorBit ORNAND2 Solutions for High-Value Wireless and Embedded Flash Memory Applications

SUNNYVALE, Calif. -- Aug 21, 2008 -- Spansion Inc. (Nasdaq: SPSN), the world's largest pure-play provider of Flash memory solutions, today announced it has extended its current agreement with Semiconductor Manufacturing International Corporation ("SMIC", NYSE: SMI and SEHK: 0981.HK) for the production of 65-nanometer MirrorBit NOR to include the manufacture of 43-nanometer Spansion(R) MirrorBit(R) ORNAND2(TM) Flash memory on 300mm wafers. By leveraging SMIC's world-class manufacturing expertise, Spansion can offer a more cost-effective and differentiated product portfolio for its embedded and wireless Flash memory customers. Specific terms of the deal were not disclosed.

"Spansion's expanded agreement with SMIC for leading-edge MirrorBit production is a strategic move to increase Spansion's ability to serve our customer base with a richer range of solutions," said Bertrand Cambou, chief executive officer and president of Spansion Inc. "The deepening of our relationship with SMIC also further expands our presence in China, one of the fastest growing markets for Flash memory."

MirrorBit ORNAND2 Flash memory is the next generation of Spansion's MirrorBit ORNAND family expanding the company's current portfolio with more diversified, high-value solutions. By leveraging the company's proprietary MirrorBit charge trapping technology with memory cells connected in a NAND array architecture, Spansion MirrorBit ORNAND2 is designed to support faster write performance and a broader range of densities.

Spansion's proprietary MirrorBit technology serves as the basis for all of the company's leading-edge offerings including MirrorBit ORNAND2, MirrorBit NOR, MirrorBit Eclipse and Spansion EcoRAM architectures. With the successful transfer of Spansion's MirrorBit technology, SMIC will ramp production of 65nm MirrorBit Eclipse and Spansion EcoRAM. Capitalizing on the efficiency of Spansion MirrorBit technology developed over a decade through extensive research, development and commercial success, the new MirrorBit ORNAND2 technology will require 25 percent fewer masking layers than MirrorBit NOR technology and is expected to deliver superior quality over floating-gate NAND solutions. As floating gate NAND Flash memory technology faces increasing scaling challenges, Spansion is in a unique position based on its experience with charge trapping technology to deliver compelling solutions at leading edge nodes.

"By manufacturing Spansion MirrorBit technology at leading-edge technology nodes, SMIC can optimize fab utilization," said Dr. Richard Chang, president and CEO of SMIC. "Working closely with Spansion, SMIC will be able to extend our leadership in Flash memory production to increase participation in high-value markets."

After completing development at its Submicron Development Center (SDC) in Sunnyvale, California, Spansion plans to transition 43nm MirrorBit ORNAND2 technology to SMIC's 300mm facility in Wuhan, China. Concurrently, Spansion also plans to ramp production of 45nm Spansion EcoRAM, MirrorBit NOR and Eclipse solutions at its own SP1 flagship 300mm wafer fabrication facility in 2009. Spansion expects to complete the development of 32nm MirrorBit technology for MirrorBit ORNAND2, MirrorBit Eclipse and Spansion EcoRAM at its SDC facility and ramp the technology to production in 2010.

The extended relationship with SMIC is a key element in Spansion's strategy to broaden strategic alliances. Spansion plans to focus its own capital investments on the accelerated development of leading-edge MirrorBit Flash memory technology, the development of value-added, high margin solutions, as well as its state of the art 300-millimeter SP1 Flash memory manufacturing facility in Aizu-Wakamatsu, Japan.

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.