SUNNYVALE, Calif. (AP) -- Flash memory chip maker Spansion Inc. and Taiwan's Advanced Semiconductor Engineering Inc. said Wednesday they have signed a non-binding memorandum of understanding to form a joint venture that would jointly own a Spansion manufacturing facility in China.
Financial terms were not disclosed.
The Spansion Suzhou facility, which has operated in China since 1998, is the flagship factory in Spansion's final manufacturing network and employs about 1,100 people.
The companies said the move was "a significant milestone in Spansion's strategy to focus on its own core competencies and establish strategic alliances with industry leaders in final manufacturing."
The joint venture is expected to allow management to reduce capital expenditures and increase asset utilization, they said.
The companies said they plan to complete a definitive agreement by the end of the year, subject to regulatory approvals.
Spansion stock slipped 7 cents, or 5.5 percent, to $1.20 in morning trading. U.S.-traded shares of Advanced Semiconductor Engineering fell 18 cents, or 7.8 percent, to $2.13.