Spansion, the chipmaker hit by overcapacity and falling prices for Flash memory, could emerge from Chapter 11 bankruptcy protection in the fourth quarter.

The debt-ridden Silicon Valley company filed for protection from its creditors on March 1, but its latest quarterly results show restructuring left it with cash balances of $220m at the end of June, up from $95m in March. It reported $376m in quarterly sales. Read more

  • After more than 40 years, a first from Intel: the leading semiconductor company announced that it would outsource the manufacturing of some of its chips. The unprecedented agreement with Taiwan’s TSMC shows how Intel is adjusting its manufacturing and business model as the Atom processor starts to play a bigger part in its future. While the US company will still make the low-cost chips for netbook computers itself, it said that TSMC’s relationships with device makers would help the technology find its way into a much wider range of smartphones and other gadgets.

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If the daily bad news about semiconductors continues much longer, Silicon Valley may shrink to a gulch.

The headlines were unrelentingly dismal on Tuesday as the industry reeled from collapsing demand.

Consider these lowlights: Read more