10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2014

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to

Commission File Number 001-34747

SPANSION INC.

 (Exact name of registrant as specified in its charter)

Delaware	20-3898239
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

915 DeGuigne Drive Sunnyvale, California	94085
(Address of principal executive offices)	(Zip Code)

(408) 962-2500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒      No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒      No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer   ☒	Accelerated filer ☐
Non-accelerated filer   ☐	Smaller reporting company  ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.          Yes  ☒    No ☐

As of October 29, 2014, the registrant had 62,052,782 shares of Class A Common Stock outstanding at $0.001 par value per share.

Table of Contents

INDEX

			Page No.
Part I.	Financial Information		1
	Item 1.	Financial Statements	1
		Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 28, 2014 and September 29, 2013 (Unaudited)	1
		Condensed Consolidated Statements of Comprehensive Income (Loss) – Three and Nine Months Ended September 28, 2014 and September 29, 2013 (Unaudited)	2
		Condensed Consolidated Balance Sheets – September 28, 2014 (Unaudited) and December 29, 2013	3
		Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 28, 2014 and September 29, 2013 (Unaudited)	4
		Notes to Condensed Consolidated Financial Statements	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
	Item 4.	Controls and Procedures	41
Part II.	Other Information		42
	Item 1.	Legal Proceedings	42
	Item 1A.	Risk Factors	43
	Item 6.	Exhibits	43
		Signature

i 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Spansion Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
	2014			2013			2014			2013
Net sales	$	315,930		$	273,378		$	942,346		$	658,020
Cost of sales		215,102			217,209			658,864			498,640
Gross profit		100,828			56,169			283,482			159,380
Research and development		43,241			38,341			126,505			84,666
Sales, general and administrative		60,457			54,544			177,169			117,441
Restructuring charges		-			6,264			-			6,264
Operating loss		(2,870	)		(42,980	)		(20,192	)		(48,991	)
Interest income and other, net		453			3,578			1,794			7,658
Interest expense		(5,988	)		(7,351	)		(18,214	)		(22,333	)
Gain on acquisition of Microcontroller and Analog business		-			8,205			-			8,205
Loss before income taxes		(8,405	)		(38,548	)		(36,612	)		(55,461	)
Provision (benefit) for income taxes		2,441			(1,644	)		8,703			(891	)
Net loss		(10,846	)		(36,904	)		(45,315	)		(54,570	)
Net loss per share
Basic	$	(0.18	)	$	(0.63	)	$	(0.75	)	$	(0.93	)
Diluted	$	(0.18	)	$	(0.63	)	$	(0.75	)	$	(0.93	)
Shares used in per share calculation
Basic		61,543			58,785			60,705			58,506
Diluted		61,543			58,785			60,705			58,506

See accompanying notes.

1

Spansion Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013
Net loss	$	(10,846	)	$	(36,904	)	$	(45,315	)	$	(54,570	)
Other comprehensive income (loss), net of tax:
Unrealized gain on recovery from impaired investments reclassified into earnings		-			-			-			(1,200	)
Net foreign currency translation gain (loss)		(23	)		117			347			(1,420	)
Net unrealized gain (loss) on cash flow hedges:
Net unrealized hedge gain (loss) arising during the period		2,716			(391	)		(4,174	)		13,669
Net gain reclassified into earnings for revenue hedges (ineffective portion)		-			-			-			(2,415	)
Net loss (gain) reclassified into earnings for revenue hedges (effective portion)		528			(3,113	)		3,511			(7,701	)
Net loss reclassified into earnings for expense hedges		2,815			-			2,815			-
Net unrealized gain (loss) on cash flow hedges		6,059			(3,504	)		2,152			3,553
Other comprehensive income (loss), net of tax		6,036			(3,387	)		2,499			933
Total comprehensive loss	$	(4,810	)	$	(40,291	)	$	(42,816	)	$	(53,637	)

See accompanying notes.

2

Spansion Inc.

Condensed Consolidated Balance Sheets 

(in thousands, except par value and share amounts) 

(Unaudited)

	September 28, 2014			December 29, 2013
Assets
Current assets:
Cash and cash equivalents	$	281,991		$	286,069
Short-term investments		44,778			25,428
Accounts receivable, net		164,933			177,838
Inventories		269,267			254,154
Deferred income taxes		9,282			4,592
Prepaid expenses and other current assets		56,154			52,756
Total current assets		826,405			800,837
Property, plant and equipment, net		189,266			185,505
Intangible assets, net		140,835			167,949
Goodwill		166,334			166,422
Other assets		61,456			60,208
Total assets	$	1,384,296		$	1,380,921
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	153,785		$	126,680
Accrued compensation and benefits		44,441			57,876
Accrued liabilities and other		149,048			86,352
Income taxes payable		486			4,651
Deferred income		37,745			30,247
Current portion of long-term debt		22,285			97,320
Total current liabilities		407,790			403,126
Deferred income taxes		4,917			3,675
Long-term debt, less current portion		387,284			404,612
Other long-term liabilities		50,385			32,048
Total liabilities		850,376			843,461
Commitments and contingencies (Note 16)		-			-
Stockholders’ equity:
Capital stock:
Class A common stock, $0.001 par value, 150,000,000 shares authorized, 61,819,732 shares issued and outstanding as of September 28, 2014 (58,882,949 shares as of December 29, 2013)		62			59
Class B common stock, $0.001 par value, 1 share authorized, 0 shares issued and outstanding as of September 28, 2014 (1 share issued and outstanding as of December 29, 2013)		-			-
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 0 shares issued and outstanding		-			-
Additional paid-in capital		786,667			747,393
Accumulated deficit		(251,275	)		(205,959	)
Accumulated other comprehensive loss (Note 5)		(1,534	)		(4,033	)
Total stockholders' equity		533,920			537,460
Total liabilities and stockholders' equity	$	1,384,296		$	1,380,921

See accompanying notes.

3

Spansion Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Nine Months Ended
	September 28,			September 29,
	2014			2013
Cash Flows from Operating Activities:
Net loss	$	(45,315	)	$	(54,570	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		80,540			65,053
Gain on liquidation of auction rate securities		-			(1,200	)
Gain on recovery of impaired investments		(1,629	)		(9,592	)
Benefit for deferred income taxes		(3,394	)		(3,728	)
Gain on pension assets		(2,494	)		-
Net gain on sale and disposal of property, plant and equipment		(46	)		(3,084	)
Gain on acquisition of Microcontroller and Analog business		-			(8,205	)
Costs relating to partial repurchase of 7.875% Senior Notes		1,137			2,280
Compensation recognized under employee stock plans		25,078			23,324
Reserve reversal on final settlement of bankruptcy claims		(3,205	)		-
Changes in assets and liabilities		30,955			60,265
Net cash provided by operating activities		81,627			70,543
Cash Flows from Investing Activities:
Proceeds from liquidation of auction rate securities		-			1,530
Proceeds from recovery of impaired investments		1,629			9,592
Proceeds from sale of property, plant and equipment		136			3,206
Purchases of property, plant and equipment		(34,857	)		(42,760	)
Proceeds from sales and maturities of marketable securities		18,463			116,888
Purchases of marketable securities		(37,813	)		(100,535	)
Acquisition of Microcontroller and Analog business, net of cash acquired		-			(148,144	)
Net cash used for investing activities		(52,442	)		(160,223	)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock due to options exercised		14,198			2,303
Refinancing cost on Term Loan and Revolver		-			(282	)
Payments on financing arrangements		(105,651	)		(4,333	)
Proceeds from issuance of 2.00% Senior Exchangeable Notes		-			150,000
Costs relating to issuance of 2.00% Senior Exchangeable Notes		-			(4,506	)
Purchase of capped call for the 2.00% Senior Exchangeable Notes		-			(15,375	)
Partial repurchase of 7.875% Senior Notes including costs		-			(106,779	)
Net proceeds from sale of Sunnyvale property		58,908			-
Cash settlement on hedging activities		-			(268	)
Net cash provided by (used for) financing activities		(32,545	)		20,760
Effect of exchange rate changes on cash and cash equivalents		(718	)		(232	)
Net decrease in cash and cash equivalents		(4,078	)		(69,152	)
Cash and cash equivalents, beginning of period		286,069			262,177
Cash and cash equivalents, end of period	$	281,991		$	193,025
Non-cash investing and financing activities:
Liabilities recorded for purchases of property, plant and equipment	$	21,064		$	10,448
Unpaid issuance costs relating to the 2.00% Senior Exchangeable Notes	$	-		$	460
Restricted cash relating to employee compensation and benefits received from FSL	$	-		$	32,086

See accompanying notes. 

4

Spansion Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation   

The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, the unaudited interim financial statements reflect all normal and recurring adjustments considered necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The December 29, 2013 condensed consolidated balance sheet data were derived from audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2013, as filed with the SEC on February 25, 2014 and as amended by the Form 10-K/A filed on July 8, 2014, but does not include all disclosures required by U.S. GAAP for annual periods.

         These condensed consolidated financial statements and related notes should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2013 as filed with the SEC on February 25, 2014 and as amended by the Form 10-K/A filed on July 8, 2014. The results of operations for the nine months ended September 28, 2014 are not necessarily indicative of the results that may be expected for any other interim period or for the full fiscal year.

         The Company operates on a 52- to 53-week fiscal year ending on the last Sunday in December. The additional week in a 53-week fiscal year is added to the second quarter to realign the Company’s fiscal quarters more closely to calendar quarters. Fiscal 2014 and fiscal 2013 are comprised of 52-week periods.

 References in this Quarterly Report to “Spansion,” “we,” “us,” “our,” or the “Company” shall mean Spansion Inc. and our consolidated subsidiaries, unless the context indicates otherwise.

Principles of Consolidation

        The unaudited condensed consolidated financial statements include the results of operations of the Company and all of the Company’s wholly-owned subsidiaries. All intercompany accounts have been eliminated.

Use of Estimates

        The preparation of the Company’s consolidated financial statements and disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of commitments and contingencies and the reported amounts of revenues and expenses during the reporting periods. Estimates are used to account for the fair value of certain marketable securities, revenue adjustments, the allowance for doubtful accounts, inventory write-downs, valuation of intangible assets, impairment of long-lived assets, legal contingencies, income taxes, stock-based compensation expenses, the fair value of long-term debt, product warranties and pension related liabilities. Actual results may differ from those estimates, and such differences may be material to the Company’s condensed consolidated financial statements.

2. Recent Accounting Pronouncements

In May 2014, the FASB issued an accounting standard update that provides for a new single revenue accounting model that will replace existing revenue recognition guidance. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which a Company expects to be entitled in exchange for those goods or services. The guidance becomes effective in the first quarter of the Company’s fiscal year ending December 31, 2017. The Company will have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard update. The Company is evaluating the impact that the standard update will have on its consolidated financial statements.

5

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

In August 2014, the FASB issued an accounting standard update relating to management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and on the related disclosures. The update requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. The guidance is effective in the interim and annual periods beginning after December 15, 2016, with early application permitted.  The adoption of this update is not expected to have a material effect on the Company’s consolidated financial statements or disclosures.

3. Acquisition         

On August 1, 2013, the Company acquired the microcontroller and analog business (the MCA business) of Fujitsu Semiconductor Limited (FSL) for purchase consideration of $158.5 million, ($150.0 million, net of cash acquired). Pursuant to the terms and conditions of a Stock Purchase Agreement with FSL, the Company acquired certain subsidiaries and assets and assumed certain liabilities of FSL for purposes of acquiring FSL’s business of designing, developing, marketing and selling microcontroller and analog semiconductor products. 

There were no changes in fiscal 2014 to the allocation of purchase price to the net assets acquired under the MCA business.

Pro Forma consolidated results of operations for fiscal 2013

The following unaudited pro forma consolidated results of operations for the three months and nine months ended September 29, 2013 assumes the acquisition had occurred as of December 26, 2011. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisition had taken place on December 26, 2011 or of results that may occur in future. For the purpose of this pro forma financial information, adjustments were made to include the depreciation of the acquired property and equipment, the amortization of the acquired intangible assets and the income tax effects relating to such adjustments. Adjustments were also made to exclude the gain on acquisition, acquisition related costs, amortization of the fair market value of inventory markup and the income tax effects relating to such adjustments for the three and nine months ended September 29, 2013.

	Three Months Ended			Nine Months Ended
	September 29, 2013			September 29, 2013
	(in thousands, except per share amounts)
Net sales		314,701			947,551
Net loss		(24,106	)		(159,988	)
Net loss
Basic		(0.41	)		(2.73	)
Diluted		(0.41	)		(2.73	)

The MCA business contributed net sales of $92.9 million from acquisition date of August 1, 2013 through September 29, 2013. It is impracticable to determine the earnings for the MCA business as the Company does not allocate non-operating items to its various product groups.

6

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

4. Balance Sheet Components

	September 28, 2014			December 29, 2013
	(in thousands)
Cash and cash equivalents
Cash	$	280,421		$	282,163
Cash equivalents:
Money market funds		1,010			3,906
Certificates of deposit		560			-
Cash and cash equivalents	$	281,991		$	286,069
Short-term investments
Time deposits		21,072			14,045
Certificates of deposit		23,706			11,383
Short-term investments	$	44,778		$	25,428
Account receivable, net
Accounts receivable, gross	$	165,320		$	178,252
Allowance for doubtful accounts		(387	)		(414	)
Account receivable, net	$	164,933		$	177,838
Inventories
Raw materials	$	9,892		$	11,056
Work-in-process		211,462			176,601
Finished goods		47,913			66,497
Inventories	$	269,267		$	254,154
Property, plant and equipment, net
Land	$	45,168		$	45,168
Buildings and leasehold improvements		68,855			61,923
Equipment		422,385			385,679
Construction in progress		19,632			19,734
Accumulated depreciation and amortization		(366,774	)		(326,999	)
Property, plant and equipment, net	$	189,266		$	185,505
Accrued compensation and benefits
Accrued vacation	$	12,050		$	11,077
MCA business employees pension related obligation		6,329			22,406
Others		26,062			24,393
Accrued compensation and benefits	$	44,441		$	57,876
Accrued liabilities and other
Short term license liability	$	6,064		$	13,003
Obligation recorded from sale of Sunnyvale property		59,782			-
Litigation reserve		23,570			20,419
Others		59,632			52,930
Accrued liabilities and other	$	149,048		$	86,352
Other long term liabilities
MCA business employees pension related obligation	$	16,978		$	-
Others		33,407			32,048
Other long term liabilities	$	50,385		$	32,048

7

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

The Company’s cash balances are held in numerous locations throughout the world, with the majority in the United States. As of September 28, 2014, the Company had cash, cash equivalents, and short-term investments of $309.4 million held within the United States and $17.4 million held outside of the United States. As of December 29, 2013, the Company has cash, cash equivalents, and short term investments of $298.3 million held within the United States and $13.2 million held outside the United States.

All securities other than the FDIC insured certificates of deposit were designated as available-for-sale. FDIC insured certificates of deposit are held to maturity. Gross unrealized gains and losses on cash equivalents and short term investments were not material as of September 28, 2014 and December 29, 2013. Gross realized gains and losses on cash equivalents and short-term investments were not material for the three months and nine months ended September 28, 2014 and September 29, 2013.

Sale of Sunnyvale property and new headquarters lease

On January 23, 2014, the Company sold its property in Sunnyvale, California, consisting of 24.5 acres of land with approximately 471,000 square feet of buildings that include its headquarters building and submicron development center, a Pacific Gas & Electric transmission facility and a warehouse building, for net consideration of $58.9 million. The Company concurrently leased back approximately 170,000 square feet of the headquarters building on a month-to-month basis with the Company having the option to continue the lease for up to 24 months; thereafter either party can terminate the lease. The first six months of the lease are rent free. For accounting purposes, the rents relating to the rent-free period have been netted against the sale proceeds and represent prepaid rent. The Company’s rent-free use of this building constitutes continuing involvement by the Company as lessee, and recognition of the sale of the property and the related gain is deferred until the lease period ends.

Due to the Company’s continuing involvement under the lease, the cash proceeds net of third-party costs were recorded under the financing method as a short term financing obligation, in accordance with the authoritative guidance on leases and sale of real estate. Interest is imputed on the financing obligation until such time as the sale can be recognized. The property continues to remain on the Company’s condensed consolidated balance sheet and the buildings are being depreciated over their remaining useful life. After the rent-free period, beginning in the third quarter of fiscal 2014, a portion of the lease payments is recorded as a reduction to the financing obligation and the remainder is recognized as interest expense. As of September 28, 2014, $59.8 million was recorded in accrued liabilities and other as a financing obligation. The Company expects to recognize a gain of approximately $38.1 million on the sale of Sunnyvale property in the fourth quarter of fiscal 2014 when the lease ends. It will be recorded within interest income and other, net in the Consolidated Financial Statements.

On May 22, 2014, the Company entered into a new headquarters lease for renting office space in San Jose, California. The lease term is for a period of 12 years, with two options to extend for periods of five years each after the initial lease term. The initial lease term will commence on January 1, 2015 and expire on December 31, 2026.

8

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

5. Accumulated Other Comprehensive Income (Loss)

      The following table summarizes the activity related to accumulated other comprehensive loss, net of tax:

	Foreign Currency Translation Adjustment			Net Gains and Losses on Cash Flow Hedges				Total
	(in thousands)
Beginning Balance, December 29, 2013	$	(4,035	)	$	2			$	(4,033	)
Other comprehensive income before reclassification, net of tax		347			(4,174	)			(3,827	)
Amounts reclassified to earnings on cash flow hedges		-			6,326		(1)		6,326
Net other comprehensive income	$	347		$	2,152			$	2,499
Ending Balance, September 28, 2014	$	(3,688	)	$	2,154			$	(1,534	)

(1) Please see note 11 for the further information on the reclassification

6. Equity Incentive Plan and Stock-Based Compensation

Equity Incentive Plan 

The Company’s 2010 Equity Incentive Award Plan (2010 Plan) provides for the grant of stock options, stock appreciation rights, restricted stock units, restricted stock, performance awards, stock payments, dividend equivalents and deferred stock to its employees, consultants and non-employee members of its Board of Directors.

In the first quarter of fiscal 2014, the Company granted performance based restricted stock units (PSUs) to certain senior executives with vesting subject to achievement of performance goals established by the Compensation Committee of the Company’s Board of Directors. Performance goals are based on a combination of Company- specific financial targets, and a relative total shareholder return (TSR) target that compares the Company’s TSR over a three-year period to a benchmark peer-group TSR. These stock awards vest at the end of the performance period of three years from the grant date. The number of stock awards that can vest range from 0% to 150% of those initially awarded. In evaluating the fair value of these awards, the Company used a combination of the stock price at the close of market on grant date for the performance condition, and a Monte Carlo simulation on grant date, taking the market-based goal into consideration, for the market condition.

         In the first half of fiscal 2013, the Company granted PSUs to certain senior executives. The PSUs have vesting percentages ranging from 0% to 100%, calculated based on the relative TSR of the Company’s common stock as compared to the TSR of its peer companies. These awards are divided into two equal tranches, each with an 18 month performance period. The first performance period is from February 1, 2013 through July 31, 2014 and the second performance period is from August 1, 2014 through January 31, 2016. In the third quarter of fiscal 2014, the first tranche of the PSUs vested at 100% based on the relative TSR of the Company’s common stock as compared to the TSR of its peer companies.

2014 Employee Stock Purchase Plan

On May 16, 2014, the stockholders of the Company approved the Spansion Inc. 2014 Employee Stock Purchase Plan (ESPP), which is qualified under Section 423 of the Internal Revenue Code. The ESPP provides that eligible employees may contribute up to 10% of their base salary towards the purchase of the Company’s common stock. The per share purchase price of the employee will be 85% of the fair market value of the stock at the beginning or the end of the offering period, whichever is lower.

The total number of shares of common stock reserved for issuance under the plan is 2.0 million shares. The plan shares will be increased automatically on an annual basis on January 1 of each year. The increase will be equal to one percent of total number of outstanding shares of the Company’s common stock on the immediately preceding December 31, subject to certain restrictions. The initial offering period under the ESPP commenced on August 15, 2014 and ends on February 13, 2015.

9

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

         The shares of common stock available for grant under the 2010 Plan are shown in the following table:

	Shares Available For Grant
Balance as of December 29, 2013		2,350,404
Additional shares issuable under 2010 plan (annual increase for 2014)		2,069,902
Stock options forfeited/cancelled through September 28, 2014		299,269
RSUs granted, net of forfeitures/cancellations		(1,211,595	)
Key Executive RSUs forfeited/cancelled through September 28, 2014		357,870
PSUs granted, net of forfeitures/cancellations (1)		(256,000	)
Balance as of September 28, 2014		3,609,850

(1) Includes PSUs granted in fiscal 2014 at target. Additional awards that could be earned under the fiscal 2014 grant total 137,000.

Stock-Based Compensation

           The following table presents the total stock-based compensation expense by financial statement caption resulting from the Company’s stock options, RSUs, PSUs, Key Executive RSUs and the ESPP:

	Three Months Ended				Nine Months Ended
	September 28, 2014		September 29, 2013		September 28, 2014		September 29, 2013
	(in thousands)
Cost of sales	$	1,553	$	1,384	$	4,476	$	4,235
Research and development		2,484		1,952		6,298		7,420
Sales, general and administrative		5,439		3,692		14,304		11,669
Stock-based compensation expense after income taxes(1)	$	9,476	$	7,028	$	25,078	$	23,324

⁽¹⁾ There was no income tax benefit related to stock-based compensation because all of the Company's U.S. deferred tax assets, net of U.S. deferred tax liabilities, continue to be subject to a full valuation allowance.

             In the third quarter of fiscal 2014, the Company also began recording expense on the performance awards granted in fiscal 2011 and fiscal 2012 (Key Executive RSU) as it expects that the performance goals for the year will be met. As of September 28, 2014, the total unrecognized compensation cost related to unvested stock options, RSUs, Key Executive RSUs, PSUs and on the ESPP was approximately $31.7 million after reduction for estimated forfeitures which will be recognized by the end of first quarter of fiscal 2017.

No options were granted during the three and nine months ended September 28, 2014. The fair value of each stock option granted during the three and nine months ended September 29, 2013 was estimated at the date of grant using a Black-Scholes option pricing model, with the following assumptions for grants:

	Three Months Ended			Nine Months Ended
	September 29, 2013			September 29, 2013
Expected volatility		41.84	%		47.06	%
Risk-free interest rate		1.14	%		0.94	%
Expected term (in years)		4.35			4.35
Dividend yield		0.00	%		0.00	%

10

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

          The weighted average fair value of the Company’s stock options granted is as follows:

	Three Months Ended		Nine Months Ended
	September 29, 2013		September 29, 2013
Weighted average fair value of stock options granted	$	3.68	$	4.69

The fair value of each PSU award granted in fiscal 2014 and fiscal 2013 was determined using a Monte Carlo pricing model, and was estimated using the following assumptions:

	Nine Months Ended
	September 28, 2014			September 29, 2013
Stock price on grant date	$	16.58		$	11.50
Expected volatility		42.79	%		50.90	%
Risk-free interest rate		0.73	%		0.21	%
Dividend yield		0.00	%		0.00	%

Stock Option and Restricted Stock Unit Activity

          The following table summarizes stock option activities and related information under the 2010 Plan for the periods presented:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Life (in Years)		Value
								(in thousands)
Outstanding stock options as of December 29, 2013		6,542,929		$	13.03		4.42	$	14,061
Granted		-		$	-
Cancelled/Forfeited		(299,269	)	$	15.39
Exercised		(1,236,390	)	$	18.06			$	8,130
Outstanding stock options as of September 28, 2014		5,007,270		$	13.29		3.73	$	46,191
Total vested and exercisable as of September 28, 2014		4,386,657		$	13.63		3.55	$	38,934

No income tax benefit was realized from stock option exercises for the three and nine months ended September 28, 2014.

11

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

             The following table summarizes RSU award activities and related information for the nine months ended September 28, 2014:

	RSU
				Weighted Average
	Number of			Grant-date
	Shares			Fair Value
Outstanding as of December 29, 2013		2,384,712		$	14.01
Granted		1,320,531		$	16.13
Cancelled/Forfeited		(108,936	)	$	13.09
Vested		(1,337,996	)	$	12.83
Outstanding as of September 28, 2014		2,258,311		$	15.99

The following table summarizes Key Executive RSUs and PSU award activities and related information for the nine months ended September 28, 2014.

	Key Executive RSU					PSU
				Weighted Average					Weighted Average
	Number of			Grant-date		Number of			Grant-date
	Shares			Fair Value		Shares			Fair Value
Outstanding as of December 29, 2013		974,286		$	12.40		362,000		$	7.38
Granted		-		$	-		274,000	(1)	$	17.94
Cancelled/Forfeited		(357,870	)	$	11.03		(18,000	)	$	7.40
Vested		(318,781	)	$	11.37		(172,000	)	$	7.40
Outstanding as of September 28, 2014		297,635		$	15.15		446,000		$	13.86

(1) Includes performance awards granted in fiscal 2014 at target. Additional awards that could be earned under the fiscal 2014 grant total 137,000.

12

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

7. Net Income (Loss) Per Share

 The following table presents the computation of basic and diluted net loss per share:

	Three Months Ended						Nine Months Ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013
	(in thousands except for per-share amounts)
Numerator:
Net loss	$	(10,846	)	$	(36,904	)	$	(45,315	)	$	(54,570	)
Denominator:
Denominator for basic / diluted net loss per share, weighted average shares		61,543			58,785			60,705			58,506
Net loss per share:
Basic / Diluted net loss per share	$	(0.18	)	$	(0.63	)	$	(0.75	)	$	(0.93	)
Potentially dilutive shares excluded from the diluted net loss per share computation because their effect would have been anti-dilutive
RSUs, PSUs, options and the employee stock purchase plan		7,846			4,441			7,174			4,555
Conversion of Senior Exchangeable Notes		10,814			3,996			10,814			1,352
Total antidilutive shares		18,660			8,437			17,988			5,907

8. Intangible Assets and Goodwill

Intangible Assets

          The following table presents the balance of intangible assets as of the dates indicated below:

			September 28, 2014							December 29, 2013
	Estimated range of lives (in years)		Gross Amount (2)		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
			(in thousands)
Developed technology		5 to 10	$	140,976	$	(69,333	)	$	71,643	$	140,476	$	(53,661	)	$	86,815
Customer relationships		5 to 10		110,039		(45,945	)		64,094		110,119		(35,976	)		74,143
Trade names		0.5 to 7		8,079		(5,287	)		2,792		9,478		(5,545	)		3,933
Trademarks		7 to 8		2,700		(394	)		2,306		2,700		(142	)		2,558
IP R&D (1)				-		-			-		500		-			500
Total Intangible Assets			$	261,794	$	(120,959	)	$	140,835	$	263,273	$	(95,324	)	$	167,949

(1) All of the IP R&D reached technological feasibility during the nine months ended September 28, 2014 and was reclassified into developed technology.

(2) The changes in gross balance of intangible assets resulted from the removal of fully amortized assets no longer in use and from foreign currency translation adjustments.

             The actual amortization expense for the intangible assets is as shown below:

	Three Months Ended				Nine Months Ended
	September 28, 2014		September 29, 2013		September 28, 2014		September 29, 2013
	(in thousands)
Amortization expense	$	8,940	$	9,514	$	27,034	$	23,140

13

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

The estimated future amortization expense for intangible assets as summarized below:

	Estimated Future Amortization
	(in thousands)
Fiscal 2014 (remaining 3 months)	$	7,929
Fiscal 2015		35,759
Fiscal 2016		35,926
Fiscal 2017		25,061
Fiscal 2018		19,607
Fiscal 2019 and beyond		16,553
Total	$	140,835

Goodwill

          The following table represents the balance of goodwill as of the dates indicated below:

	September 28, 2014		December 29, 2013
	(in thousands)
Goodwill	$	166,334	$	166,422

          The changes in the carrying amount of goodwill since December 29, 2013 resulted from foreign currency translation adjustments.

9. Financing arrangements

          The following table summarizes the Company’s debt:

	September 28, 2014		December 29, 2013
	(in thousands)
Debt obligations:
Term Loan	$	294,334	$	296,135
2.00% Senior Exchangeable Notes		115,235		111,733
7.875% Senior Notes		-		94,064
Total debt	$	409,569	$	501,932
Less: current portion		22,285		97,320
Long-term debt	$	387,284	$	404,612

The Company is in compliance of all the covenants under the 2.00% Senior Exchangeable Notes and Term Loan as of September 28, 2014.

14

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

2.00% Senior Exchangeable Notes due 2020

The net carrying amount of the liability component of 2.00% Senior Exchangeable Notes due 2020 (the Notes) consists of the following:

	September 28, 2014			September 29, 2013
	(in thousands)
Principal amount	$	150,000		$	150,000
Unamortized debt discount		(34,765	)		(39,391	)
Net carrying value	$	115,235		$	110,609

The following table presents the interest expense recognized on the Notes:

	Three Months Ended		Nine Months Ended		Three and Nine Months Ended
	September 28, 2014		September 28, 2014		September 29, 2013
	(in thousands)
Contractual interest expense at 2% per annum	$	746	$	2,230	$	290
Amortization of debt issuance costs		130		391		50
Accretion of debt discount		1,185		3,502		432
Total	$	2,061	$	6,123	$	772

Capped Calls

In connection with the issuance of the Notes, the Company entered into capped call transactions with certain bank counterparties to reduce the potential dilution to the Company’s common stock upon exchange of the Notes. The capped call transactions have a strike price of approximately $13.87 and a cap price of approximately $18.14, and are exercisable when and if the Notes are converted. If upon conversion of the Notes, the price of the common stock is above the strike price of the capped calls, the counterparties will deliver shares of the Company’s common stock and/or cash with an aggregate value approximately equal to the difference between the price of our common stock at the conversion date (with a maximum price for purposes of this determination equal to the cap price) and the strike price, multiplied by the number of shares of our common stock related to the capped call transactions being exercised. The capped call transactions expire on September 1, 2020.

7.875% Senior Notes due 2017

             On January 21, 2014, the Company redeemed the remaining $94.1 million aggregate principal amount outstanding of the7.875% Senior Notes due 2017 (the Senior Notes) at a redemption price that was 103.938% of their face value. The Company paid an aggregate amount of $99.1 million, including redemption price, accrued and unpaid interest, and repurchase premium, and recorded a loss on redemption of $4.8 million within Interest income and other, net in the Condensed Consolidated Statement of Operations. The Company redeemed these Senior Notes with the proceeds from the issuance of the Notes.

2012 Revolving Credit Facility

As of September 28, 2014, the Company was in compliance with all of the 2012 Revolving Credit Facility’s covenants. However, drawdown under the 2012 Revolving Credit Facility requires that the Company meet or obtain a waiver to certain conditions including the senior secured leverage ratio not to exceed 2.75:1.00 and compliance with coverage and leverage ratios, as of the last day of the most recently ended fiscal quarter. Based on its operating results for the three months ended September 28, 2014, the Company does not meet the maximum leverage ratio limit. The Company has not obtained a waiver for those conditions; accordingly, it is not able to draw down on the 2012 Revolving Credit Facility. The Company did not need to draw on the revolving line of credit during the three months ended September 28, 2014 and believes that its sources of cash and liquidity are sufficient to meet the business requirements for the next 12 months.

15

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

10. Fair Value Measurement

              The fair value measurements of the Company’s financial assets and liabilities, categorized into types of instruments, are set forth in the table below based upon the fair value hierarchy:

	September 28, 2014							December 29, 2013
	Level 1		Level 2		Total			Level 1		Level 2		Total
	(in thousands)
Money market funds	$	1,010	$	-	$	1,010	(1)	$	3,906	$	-	$	3,906	(2)
Foreign Exchange Forward Contracts		-		3,928		3,928			-		3,493		3,493
Total financial assets	$	1,010	$	3,928	$	4,938		$	3,906	$	3,493		7,399
Foreign Exchange Forward Contracts			$	2,010	$	2,010		$	-	$	313	$	313
Total financial liabilities	$	-	$	2,010	$	2,010		$	-	$	313	$	313

⁽¹⁾ Total cash and cash equivalents and short-term investments of $326.8 million as of September 28, 2014 includes cash of $280.4 million held in operating accounts, $1.0 million in money market funds, $24.3 million held in certificates of deposit and $21.1 million held in time deposit accounts.

⁽²⁾ Total cash and cash equivalents and short-term investments of $311.5 million as of December 29, 2013 includes cash of $282.2 million held in operating accounts, $3.9 million in money market funds, $11.4 million held in certificates of deposit and $14.0 million in time deposit accounts.

Fair Value of Other Financial Instruments Not Carried At Fair Value

     The Company’s Term Loan and Notes are traded in the market and the fair values are Level 1, as they are based on quoted market prices. Prior to redemption in fiscal 2013, the Senior Notes were traded in the market and the fair value was Level 1. The carrying amounts and estimated fair values of the Company’s debt obligations are as follows:

	September 28, 2014				December 29, 2013
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
	(in thousands)
Debt traded in the market:
Term Loan	$	294,334	$	290,287	$	296,135	$	295,170
2.0% Senior Exchangeable Notes		115,235		199,356		111,733		129,104
7.875% Senior Notes		-		-		94,064		97,591
Total Debt Obligations	$	409,569	$	489,643	$	501,932	$	521,865

   The fair value of the Company’s cash equivalents, accounts receivable, accounts payable and other current liabilities approximates their carrying value.

16

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

11. Derivative Financial Instruments

The Company entered into multiple foreign exchange forward contracts to hedge certain operational exposures resulting from movements in Japanese yen exchange rates. The Company’s hedging policy is designed to mitigate the impact of foreign currency exchange rate movements on its operating results. Some foreign currency forward contracts were considered to be economic hedges that were not designated as hedging instruments while others were designated as cash flow hedges. Whether designated or undesignated, these forward contracts protect the Company against the variability of forecasted foreign currency cash flows resulting from revenues, expenses and net asset or liability positions designated in currencies other than the U.S. dollar and they are not speculative in nature.

Cash Flow Hedges

In the third quarter of fiscal 2014, the Company entered into cash flow hedges to protect non-functional currency inventory purchases and certain other operational expenses, in addition to its on-going program of cash flow hedges to protect its non-functional currency revenues against variability in cash flows due to foreign currency fluctuations. The Company’s foreign currency forward contracts that were designated as cash flow hedges have maturities between three and eight months. The maximum original duration of any contract allowable under the Company’s hedging policy is fifteen months. All hedging relationships are formally documented, and the hedges are designed to offset changes to future cash flows on hedged transactions at the inception of the hedge. The Company recognizes derivative instruments from hedging activities as either assets or liabilities on the balance sheet and measures them at fair value on a quarterly basis. The Company records changes in the intrinsic value of its cash flow hedges in accumulated other comprehensive income in the accompanying Consolidated Balance Sheets, until the forecasted transaction occurs. Interest charges or “forward points” on the forward contracts are excluded from the assessment of hedge effectiveness and are recorded in interest and other income (expense), net in the accompanying Condensed Consolidated Statements of Operations. When the forecasted transaction occurs, the Company reclassifies the related gain or loss on the cash flow hedge to revenueor costs, depending on the risk hedged.  In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, the Company will reclassify the gain or loss on the related cash flow hedge from accumulated other comprehensive income to interest and other income (expense), net in its Condensed Consolidated Statements of Operations at that time.

The Company evaluates hedge effectiveness at the inception of the hedge prospectively as well as retrospectively and records any ineffective portion of the hedge in interest and other income (expense), net in its Condensed Consolidated Statements of Operations.

At September 28, 2014, the Company had outstanding forward contracts to sell approximately ¥ 7.5 billion for $72.5 million and to buy approximately ¥ 12.5 billion for $116.0 million

Over the next twelve months, the Company expects to reclassify $2.2 million from accumulated other comprehensive loss to earnings as the related forecasted transactions occur.

17

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Non-designated hedges

Total notional amounts of outstanding contracts were as summarized below:

Buy / Sell	September 28, 2014	December 29, 2013
	(in millions)
Japanese Yen / US dollar	¥ 735.7/$6.8	¥ 2,945/$28.2
US dollar / Japanese Yen	$11.7/¥ 1,276	$42.0/¥ 4,047
US dollar / EUR	$33.9/€ 26.5	$23.4/€ 17.1

          The effect of derivative instruments on the Condensed Consolidated Statements of Operations for the three and nine months ended September 28, 2014 and September 29, 2013 was as follows:

	Three Months Ended					Nine Months Ended
	September 28, 2014		September 29, 2013			September 28, 2014			September 29, 2013
	(in thousands)
Derivatives Designated as Hedging Instruments
Foreign Exchange Forward Contracts
Net unrealized gain (loss) recognized in OCI (1)	$	2,716	$	(391	)	$	(4,174	)	$	13,669
Net loss (gain) reclassified from accumulated OCI into net sales (effective portion)	$	528	$	(3,113	)	$	3,511		$	(7,701	)
Net loss reclassified from accumulated OCI into cost of goods sold	$	2,449	$	-		$	2,449		$	-
Net loss reclassified from accumulated OCI into sales, general and administrative expenses	$	129	$	-		$	129		$	-
Net loss reclassified from accumulated OCI into research and development expenses	$	237	$	-		$	237		$	-
Net gain reclassified from accumulated OCI into income (ineffective portion) (2)	$	-	$	-		$	-		$	(2,415	)
Derivatives Not Designated as Hedging Instruments
Net gain (loss) recognized in income
Swap interest expense (3)	$	-	$	-		$	-		$	(8	)
Foreign Exchange Forward Contracts (2)	$	3,685	$	(1,053	)	$	5,679		$	(813	)
Foreign Exchange Options Contracts (2)	$	-	$	(197	)	$	-		$	-

(1)	Net change in the fair value of the effective portion classified in other comprehensive income (OCI)
(2)	Classified in interest income and other, net
(3)	Classified in interest expense

18

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

The gross fair values of derivative instruments on the Condensed Consolidated Balance Sheets as of September 28, 2014 and December 29, 2013 were as follows:

	September 28, 2014				December 29, 2013
Balance sheet location	Derivatives designated as hedging instruments		Derivatives not designated as hedging instruments		Derivatives designated as hedging instruments		Derivatives not designated as hedging instruments
	(in thousands)
Prepaid expenses and other current assets
Foreign Exchange Forward Contracts	$	3,610	$	318	$	-	$	3,493
Accrued liabilities and other
Foreign Exchange Forward Contracts	$	1,983	$	27	$	-	$	313

Changes to the derivative asset or derivative liability position for cash flow hedges result from weakening/strengthening of the Japanese Yen to the US Dollar as of end of quarter.

Offsetting Derivative Assets and Liabilities

The Company presents its derivatives at gross fair values on the Condensed Consolidated Balance Sheets. However, the Company’s master netting and other similar arrangements allow net settlements under certain conditions. The following table sets forth the offsetting of derivative assets as of September 28, 2014 and December 29, 2013.

							Gross amounts not offset on the Condensed Consolidated Balance Sheets but have legal rights to offset
	Gross amounts of recognized Assets		Gross amounts offset in the Condensed Consolidated Balance Sheets		Net amounts of Assets presented in the Condensed Consolidated Balance Sheets		Financial Instruments (1)			Cash collateral pledged		Net amount
	(in thousands)
As of September 28, 2014:
Foreign exchange contracts	$	3,928	$	-	$	3,928	$	(2,709	)	$	-	$	1,219
As of December 29, 2013:
Foreign exchange contracts	$	3,493	$	-	$	3,493	$	(1,572	)	$	-	$	1,921

⁽¹⁾ Financial Instruments as of September 28, 2014 and December 29, 2013 relates to derivative liabilities and the term loan facility which can be net settled against derivative assets in accordance with the Company’s master netting agreements.

19

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

The following table sets forth the offsetting of derivative liabilities as of September 28, 2014 and December 29, 2013:

							Gross amounts not offset on the Condensed Consolidated Balance Sheets but have legal rights to offset
	Gross amounts of recognized Liabilities		Gross amounts offset in the Condensed Consolidated Balance Sheets		Net amounts of Liabilities presented in the Condensed Consolidated Balance Sheets		Financial Instruments				Cash collateral pledged		Net amount
	(in thousands)
As of September 28, 2014:
Foreign exchange contracts	$	2,010	$	-	$	2,010	$	(1,601	)	(1)	$	-	$	409
As of December 29, 2013:
Foreign exchange contracts	$	313	$	-	$	313	$	(226	)	(2)	$	-	$	87

(1) Financial Instruments as of September 28, 2014 relates to cash and cash equivalents, short-term investments and derivative assets which can be net settled against derivative liabilities in accordance with the Company’s master netting agreements.

(2) Financial Instruments as of December 29, 2013 relates to derivative assets which can be net settled against derivative liabilities in accordance with the Company’s master netting agreements.

12. Employee related pension obligation

A majority of the employees transferred as part of the MCA business acquisition were participants in the Fujitsu Corporate Pension Fund and Retirement Allowance Plan (together, the Fujitsu Defined Benefit Plan) until March 31, 2014. The Company accounted for its participation in the Fujitsu Defined Benefit Plan on behalf of these employees (Plan participants) as a multiemployer plan participant and recorded pension expense of $1.5 million for the quarter ended March 30, 2014.  

On January 15, 2014, the Company received approval from the transferred employees’ union to exit from the Fujitsu Defined Benefit Plan and establish the Spansion defined contribution and cash balance plans.

On April 1, 2014, the Company withdrew from the Fujitsu Defined Benefit Plan and set up the Spansion Corporate Defined Contribution Pension Plan and the Spansion Innovates Group Cash Balance Plan, an unfunded defined benefit plan of our MCA Japan business subsidiaries (Spansion Pension Plans). In accordance with the Stock Purchase Agreement with FSL, the plan assets transferred from the Fujitsu Defined Benefit Plan to the Spansion Pension Plans were valued as of March 31, 2014, one day before the transfer. The Company was not subject to any liabilities upon withdrawal from the Fujitsu Defined Benefit Plan.

          The Company recognized a gain of $2.5 million in the second quarter of fiscal 2014 due to better than expected performance of the total fund assets in the pension plan. This gain was recorded within Interest income and other, net in the Company’s Condensed Consolidated Statement of Operations for the nine months ended September 28, 2014.

           The restricted cash that was received as a part of the MCA business acquisition for the underfunded portion of the Fujitsu managed pension plan was $21.5 million as of September 28, 2014. According to the employees’ election and the expected distribution schedule, the Company recorded $6.1 million in accrued compensation and benefits and $16.3 million in other long-term liabilities on the Condensed Consolidated Balance Sheet as of September 28, 2014. Restricted cash relating to these distributions has been recorded in short term and long term assets as appropriate.

20

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Spansion Innovates Group Cash balance plan (Defined Benefit Plan)

The Spansion Innovates Group Cash balance plan (Cash Balance Plan) provides for the Company to set up a hypothetical cash balance account (CB account) for each plan participant and accumulates at a percentage of the annual pensionable salary and interest thereon. Only employees transferred as part of the MCA business acquisition are eligible to participate in the cash balance plan.

The pension charges under the Cash Balance Plan are based on certain actuarial assumptions, such as turnover rates, discount rates and other factors. The discount rate assumption is determined by comparing the expected benefit payments to the Japanese corporate bonds yield curve as of April 1, 2014. Actual results that differ from these assumptions will be accumulated and amortized over the future life of the plan participants if they exceed 10% of the projected benefit obligation (PBO).

The Company recorded a service cost of $0.3 million for the three months ended September 28, 2014 and accrued a liability of $0.6 million as of September 28, 2014. The Company expects to expense $1.0 million related to the Cash Balance Plan for fiscal year 2014.

Spansion Corporate Defined Contribution Plan

The Company recorded an expense of $0.6 million and $1.2 million under this plan for the three and nine months ended September 28, 2014, respectively, and accrued a liability of $0.2 million as of September 28, 2014.

13. Income Taxes

The following table presents the Company’s income tax expense (benefit):

	Three Months Ended					Nine Months Ended
	September 28, 2014		September 29, 2013			September 28, 2014		September 29, 2013
	(in thousands)
Income tax expense (benefit)	$	2,441	$	(1,644	)	$	8,703	$	(891	)

The Company recorded an income tax expense of $2.4 million and an income tax benefit of $1.6 million for the three months ended September 28, 2014 and September 29, 2013, respectively. The Company’s income tax expense was $8.7 million and the income tax benefit was $0.9 million for the nine months ended September 28, 2014 and September 29, 2013, respectively.

The tax expense for the three months and the nine months ended September 28, 2014 was primarily attributable to pre-tax income in foreign jurisdictions and withholding taxes related to licensing revenues.

The tax benefit for the three months and nine months ended September 29, 2013 was primarily attributable to pre-tax income in foreign jurisdictions and withholding taxes related to licensing revenues. This was offset by the release of reserves for uncertain tax positions in foreign locations and the tax impact from the MCA business acquisition.

As of September 28, 2014, all of the Company's U.S. deferred tax assets, net of deferred tax liabilities, continue to be subject to a full valuation allowance. The valuation allowance is based on the Company's assessment that it is more likely than not that the deferred tax assets will not be realizable in the foreseeable future.

21

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

As of December 29, 2013, the Company had U.S. federal and state net operating loss carry forwards of approximately $1,016 million and $219.8 million, respectively. Approximately $489.7 million of the federal net operating loss carry forwards are subject to an annual limitation of $27.2 million. These federal and state net operating losses, if not utilized, expire from 2016 to 2033. The Company also has U.S. federal credit carryovers of $3.5 million, which expire from 2020 to 2033. The Company also has state tax credits of $18.2 million, which includes California state tax credits of $17.5 million, which can be carried forward indefinitely.

If the Company were to undergo an “ownership change” for purposes of Section 382 of the Internal Revenue Code of 1986, as amended, its ability to utilize its federal net operating loss carry forwards could be limited under certain provisions of the Internal Revenue Code. As a result, the Company could incur greater tax liabilities than it would in the absence of such a limitation and any incurred liabilities could materially adversely affect the Company’s results of operations and financial condition.

14. Restructuring and Others

Beginning in the third quarter of fiscal 2013, in an effort to lower its expense levels, given the competitive pricing pressures and slower than expected growth in Japan revenues from embedded flash solutions products, the Company implemented a reduction in force to rationalize its global workforce.

            The following tables present a summary of restructuring activities related to the 2013 restructuring plandescribed above:

	Three Months Ended			Nine Months Ended			Three and Nine Months Ended
	September 28, 2014			September 28, 2014			September 29, 2013
Accrued restructuring balance, beginning of period	$	39		$	844		$	-
Provision:
Severance and others		-			-			6,264
Restructuring charges		-			-			6,264
Non-cash adjustments		(15	)		(46	)		(230	)
Cash payments		-			(774	)		(4,351	)
Accrued restructuring balance, end of period	$	24		$	24		$	1,683

15. Capital Structure

Effective January 22, 2014, SLS Spansion Holdings, LLC and its affiliates were no longer holders of at least 5% of the Company’s voting securities. Consequently, the one outstanding share of Class B Common Stock was converted into one share of Class A Common Stock.

16. Commitments and Contingencies

Purchase Commitments

The Company had $122.6 million of purchase commitments with certain suppliers, primarily for inventory items as of September 28, 2014.

Guarantees and Indemnifications

In the normal course of business, the Company is a party to a variety of agreements pursuant to which it may be obligated to indemnify the other party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations and the unique facts and circumstances involved with respect to each particular agreement. Historically, payments under these types of agreements have not had a material adverse effect on the Company’s business, results of operations or financial condition.

22

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Income Taxes

The Company is subject to audit by the Internal Revenue Service (IRS) and various other tax authorities. The Company has reserved for potential adjustments to the provision for income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities, and the Company believes that the final outcome of these examinations or agreements will not have a material effect on the Company’s results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of tax benefits in the period the Company determines the liabilities are no longer necessary. If the estimates of the federal, state, and foreign income tax liabilities are less than the ultimate assessment, a further charge to expense would result.

Product Warranties

The Company generally offers a one-year limited warranty for all its products. During the three and nine months ended September 28, 2014 and September 29, 2013, changes in the Company’s reserve for product warranty were as follows:

	Three Months Ended						Nine Months Ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013
	(in thousands)
Balance at beginning of period	$	2,513		$	1,127		$	2,055		$	2,124
Provision for warranties issued		519			760			1,890			1,360
Settlements made		(1,076	)		(827	)		(1,525	)		(2,412	)
Changes in reserve for pre-existing warranties during the period		280			106			(184	)		94
Balance at end of period	$	2,236		$	1,166		$	2,236		$	1,166

Legal Matters

In the Matter of Certain Flash Memory Chips and Products Containing the Same, U.S International Trade Commission (Investigation No. 337-TA-893).

On August 1, 2013, Spansion LLC, a wholly owned subsidiary of the Company (Spansion LLC), filed a complaint pursuant to Section 337 of the Tariff Act of 1930, as amended (Tariff Act) 19 U.S.C. § 1337 (Section 337), to request the United States International Trade Commission (ITC) to institute an investigation relating to the unlawful importation into the United States, the sale for importation, and/or the sale within the United States after importation of certain Macronix flash memory chips (Macronix Chips) that infringe certain claims of six valid patents held by Spansion LLC, and/or are made, produced or processed under, or by means of, a process covered by the claims of those patents, and products containing the Macronix Chips.

On September 9, 2013, the ITC instituted its investigation, naming the following entities as Respondents in the investigation: Macronix International Co, Ltd., of Hsin-chu, Taiwan; Macronix America, Inc., of Milpitas, CA; Macronix Asia Limited of Kanagawa Pref., Japan; Macronix (Hong Kong) Co., Ltd., of Sa Tin, N.T., Hong Kong; Acer Inc. of New Taipei City, Taiwan; Acer America Corporation of San Jose, CA; ASUSTek Computer Inc. of Taipei City, Taiwan; ASUS Computer International of Fremont, CA; Belkin International, Inc., of Playa Vista, CA; D-Link Corporation of Taipei City, Taiwan; D-Link System, Inc., of Fountain Valley, CA; Netgear Inc., San Jose, CA; Nintendo Co., Ltd., of Kyoto, Japan; and Nintendo of America, Inc., of Redmond, WA.

23

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Through this investigation, Spansion LLC seeks a general exclusion order to exclude from importation all infringing Macronix Chips and downstream products containing such chips. In the event that the ITC is unwilling to issue a general exclusion order, Spansion LLC requests a limited exclusion order be entered against each named Respondent and its subsidiaries and affiliates in order to remedy the Respondents’ violation of Section 337 and to prevent future violations by Respondents. Spansion LLC has also asked the ITC to issue a cease and desist order to ensure compliance with the requested exclusion orders.

The trial was held before the ITC in Washington, DC on October 2-10, 2014. The ITC has entered a target date of May 22, 2015, for completion of its investigation.

The U.S. Patent and Trademark Office (USPTO) has instituted inter partes review with respect to certain claims under four of the six patents involved in this investigation in response to petitions filed by Macronix. On May 7, 2014, the USPTO instituted inter partes review of claims 1-14 of U.S. Patent No. 6,459,625. On May 8, 2014, the USPTO instituted inter partes review of claims 1-4 of U.S. Patent No. 6,369,416; claims 1, 3-5, 7, 20, and 28 of U.S. Patent No. 6,731,536; and claims 1-6 and 8-13 of U.S. Patent No. 7,151,027, in response to petitions filed by Macronix. Absent a showing of good cause for delay, a final decision is expected in each of these inter partes review proceedings by May 8, 2015. A second petition for inter partes review of claims 7 and 14 of U.S. Patent No. 7,151,027 was filed by Macronix on June 4, 2014, and on August 13, 2014, the USPTO instituted inter partes review of those claims. Absent a showing of good cause for delay, a final decision on that inter partes review is expected by August 13, 2015.    

Spansion LLC v. Macronix International Co., Ltd. et. al., U.S. District Court, Northern District of California (No. 3:13-cv-03566).

On August 1, 2013, Spansion LLC filed a complaint in the U.S. District Court, Northern District of California (San Jose Division), Case No. 3:13-cv-03566-JST, against Macronix International Co., Ltd., Macronix America, Inc., Acer Inc., Acer America Corporation, ASUSTek Computer Inc., ASUS Computer International (America), Belkin International, Inc., D-Link Systems Inc., NETGEAR Inc., Nintendo Co., Ltd., and Nintendo of America, Inc. for infringement of the patents involved in the ITC Investigation No. 337-TA-893 (ITC -893 Investigation), discussed above. Spansion LLC has asked for monetary damages as well as permanent injunctive relief to prevent further infringing activity.

On August 29, 2013, Spansion LLC amended its original complaint to delete certain defendants, resulting in the eleven party defendants identified above (Defendants), and to make certain additional allegations.

On October 8, 2013, pursuant to 28 U.S.C. § 1659, each of the Defendants asserted its statutory right to a mandatory stay of all proceedings in the Northern District of California action until the conclusion of the ITC -893 Investigation. Because the requested stay is mandated by statute, Spansion LLC did not oppose the motion and the requested stay was granted.

Macronix International Co., LTD. v. Spansion Inc. et. al., U.S. District Court, Northern District of California (No. 4:14-cv-01890).

On October 2, 2013, Macronix International Co., Ltd. filed a complaint in the U.S. District Court, Eastern District of Virginia, Case No. 3:13-cv-679-REP, against Spansion Inc. and Spansion LLC for patent infringement of seven Macronix patents. The complaint sought unspecified monetary damages as well as injunctive relief.

24

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Spansion Inc. and Spansion LLC filed an answer to the complaint as well as motions to dismiss and to transfer jurisdiction.

On March 10, 2014 the court ruled favorably on both of Spansion Inc. and Spansion LLC’s motions, ordering Macronix to file an amended complaint and transferring the case to the Northern District of California. Macronix filed an amended complaint and Spansion Inc. and Spansion LLC answered that amended complaint, denying all allegations of infringement and asserting defenses of patent invalidity.

On April 28, 2014, the case was officially transferred to the Northern District of California, Oakland Division (case No. 4:14-cv-01890).

Discovery is proceeding, but no trial date has been set. On August 4, 2014, Spansion Inc. and Spansion LLC filed a motion to stay the case pending the resolution of In the Matter of Certain Devices Containing Non-Volatile Memory and Products Containing the Same, U.S. International Trade Commission Investigation No. 337-TA-922, in which Macronix asserted four of the same patents at issue in this case. A hearing on the motion to stay is scheduled for October 16, 2014. Previously, on July 17, 2014, Macronix filed a motion to leave to amend its complaint to add additional allegations against the Company and several of its customers; a hearing on Macronix’s motion for leave to amend is currently scheduled for December 11, 2014.

In the Matter of Certain Non-Volatile Memory Devices and Products Containing the Same, U.S. International Trade Commission (Investigation No. 337-TA-909).

On December 27, 2013, Macronix International Co., Ltd. and Macronix America, Inc. filed a complaint pursuant to Section 337 to request that the ITC institute an investigation relating to the importation into the United States, the sale for importation, and/or the sale within the United States after importation of certain non-volatile memory devices and products containing such devices. A revised complaint was filed on December 31, 2013, and a letter supplementing the revised complaint was filed on January 14, 2014. The revised complaint alleges that the accused devices infringe certain claims of three patents owned by Macronix (Macronix Patents), and/or are made, produced or processed under, or by means of, a process covered by the claims of the Macronix Patents.

On January 29, 2014, the Commission instituted its investigation, naming as Respondents the following entities: Spansion Inc., Spansion LLC, Spansion (Thailand) Ltd., Beats Electronics LLC of Santa Monica, CA, Delphi Automotive PLC of Gillingham, Kent, United Kingdom, Delphi Automotive Systems, LLC of Troy, Michigan, Harman International Industries, Inc. of Stamford, CT, Harman Becker Automotive Systems, Inc. of Farmington Hills, MI, Harman Becker Automotive Systems GmbH of Karlsbad, Germany, Ruckus Wireless, Inc. of Sunnyvale, CA and Tellabs, Inc. of Naperville, IL.

Through this investigation, Macronix seeks a general exclusion order to exclude from importation all of the allegedly-infringing non-volatile memory devices and downstream products containing such devices. In the event that the ITC is unwilling to issue a general exclusion order, Macronix requests that a limited exclusion order be entered against each named Respondent and its subsidiaries and affiliates in order to remedy the Respondents’ violation of Section 337 and to prevent future violations by Respondents. Macronix has also asked the ITC to issue a cease and desist order to ensure compliance with the requested exclusion orders.

The trial began before the ITC in Washington, DC on October 21, 2014. The ITC has entered a target date of May 4, 2015, for completion of its investigation.

25

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd. have filed petitions for inter partes review with the USPTO challenging the validity of the asserted claims of each of the patents asserted by Macronix against Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd. in the ITC -909 Investigation. On July 11, 2014, Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd. filed a petition for inter partes review of claims 1-6 and 10-16 of U.S. Patent No. 6,002,630. On July 21, 2014, Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd. filed a petition for inter partes review of claims 1-8 of U.S. Patent No. 6,552,360. On July 21, 2014, Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd. filed a petition for inter partes review of claims 1-3, 7, and 9-13 of U.S. Patent No. 6,100,557. The USPTO has not yet decided whether to institute proceedings based on Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd.’s petitions.

In the Matter of Certain Non-Volatile Memory Chips and Products Containing the Same, U.S. International Trade Commission (Investigation No. 337-TA-916).

On April 29, 2014, Spansion LLC filed a complaint pursuant to Section 337 of the Tariff Act to request the ITC institute an investigation relating to the unlawful importation into the United States, the sale for importation, and/or the sale within the United States after importation of certain Macronix non-volatile memory chips (Macronix Chips) that infringe certain claims of four valid patents held by Spansion LLC, and/or are made, produced or processed under, or by means of, a process covered by the claims of those patents, and products containing the Macronix Chips.

On May 29, 2014, the ITC instituted its investigation, naming the following entities as Respondents in the investigation: Macronix International Co, Ltd., of Hsin-chu, Taiwan; Macronix America, Inc., of Milpitas, CA; Macronix Asia Limited of Kanagawa Pref., Japan; Macronix (Hong Kong) Co., Ltd., of Sha Tin, N.T., Hong Kong; Acer Inc. of New Taipei City, Taiwan; Acer America Corporation of San Jose, CA; ADT Corporation of Boca Raton, FL; Amazon.com, Inc. of Seattle, WA; ASRock Inc. of Taipei City, Taiwan; ASRock America, Inc. of Chino, CA; ASUSTek Computer Inc. of Taipei, Taiwan; ASUS Computer International of Fremont, CA; Belkin International, Inc., of Playa Vista, CA; D-Link Corporation of Taipei City, Taiwan; D-Link Systems, Inc., of Fountain Valley, CA; Leap Motion, Inc. of San Francisco, CA; Lowe’s Companies, Inc. of Mooresville, NC; Lowe’s Home Centers, Inc. of Wilkesboro, NC; Microsoft Corp. of Redmond, WA; Nintendo Co., Ltd., of Kyoto, Japan; Nintendo of America, Inc., of Redmond, WA; Sercomm Corp. of Taipei, Taiwan; Vonage Holdings Corp. of Holmdel, NJ; Vonage America Inc. of Holmdel, NJ; and Vonage Marketing LLC of Holmdel, NJ.

Through this investigation, Spansion LLC seeks a general exclusion order to exclude from importation all infringing Macronix Chips and downstream products containing such chips. In the event that the ITC is unwilling to issue a general exclusion order, Spansion LLC requests a limited exclusion order be entered against each named Proposed Respondent and its subsidiaries and affiliates in order to remedy the Proposed Respondents’ violation of Section 337 and to prevent future violations by the Proposed Respondents. Spansion LLC has also asked the ITC to issue a cease and desist order to ensure compliance with the requested exclusion orders.

Discovery is proceeding. Trial is set for March 16, 2015, and the ITC has set the target date for the conclusion of the investigation as October 2, 2015.

Spansion LLC v. Macronix International Co., Ltd. et. al., U.S. District Court, Northern District of California (No. 5:14-cv-01946).

On April 28, 2014, Spansion LLC filed a complaint in the U.S. District Court, Northern District of California, Case No. 5:14-cv-01946, against Macronix International Co, Ltd; Macronix America, Inc.; Acer Inc.; Acer America Corporation; ADT Corporation; Amazon.com, Inc.; ASRock Inc.; ASRock America, Inc.; ASUSTek Computer Inc.; ASUS Computer International (America); Belkin International, Inc.; D-Link Corporation; D-Link Systems, Inc.; Leap Motion, Inc.; Lowe’s Companies, Inc.; Lowe’s Home Centers, Inc.; Microsoft Corp.; Nintendo Co., Ltd.; Nintendo of America, Inc.; Sercomm Corp.; Vonage Holdings Corp.; Vonage America Inc.; and Vonage Marketing LLC for infringement of the same patents asserted in ITC Investigation No. 337-TA-916, referenced above. Spansion LLC has asked for monetary damages as well as permanent injunctive relief to prevent further infringing activity.

26

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

On June 23, 2014, pursuant to 28 U.S.C. § 1659, the Defendants asserted their statutory right to a mandatory stay of all proceedings in this Northern District of California action until the conclusion of the ITC Investigation No. 337-TA-916. Because the requested stay is mandated by statute, Spansion LLC did not oppose the motion and the requested stay was granted on June 27, 2014.

In the Matter of Certain Devices Containing Non-Volatile Memory and Products Containing the Same, U.S. International Trade Commission (Investigation No. 337-TA-922).

On June 27, 2014, Macronix International Co., Ltd. and Macronix America, Inc. filed a complaint pursuant to Section 337 to request that the ITC institute an investigation relating to the importation into the United States, the sale for importation, and/or the sale within the United States after importation of certain devices containing non-volatile memory (Spansion Chips) and products containing the Spansion Chips. The complaint alleges that the Spansion Chips infringe certain claims of four patents owned by Macronix (Macronix Patents), and/or are made, produced or processed under, or by means of, a process covered by the claims of the Macronix Patents.

The complaint identifies the following entities as proposed respondents: Spansion Inc., Spansion LLC, Spansion (Thailand) Ltd., Aerohive Networks, Inc. of Sunnyvale, CA, Allied Telesis, Inc. of Bothell, WA, Ciena Corporation of Hanover, MD, Delphi Automotive PLC of Gillingham, Kent, United Kingdom, Delphi Automotive Systems, LLC of Troy, Michigan, Polycom, Inc. of San Jose, CA, Ruckus Wireless, Inc. of Sunnyvale, CA, ShoreTel Inc. of Sunnyvale, CA, Tellabs, Inc. of Naperville, IL, Tellabs North America, Inc. of Naperville, IL, and TiVo Inc. of San Jose, CA.

In its complaint, Macronix seeks a general exclusion order to exclude from importation all of the allegedly-infringing non-volatile memory and downstream products containing such non-volatile memory. In the event that the ITC is unwilling to issue a general exclusion order, Macronix requests that a limited exclusion order be entered against each named Respondent and its subsidiaries and affiliates in order to remedy the Respondents’ violation of Section 337 and to prevent future violations by Respondents. Macronix has also asked the ITC to issue a cease and desist order to ensure compliance with the requested exclusion orders.

On July 29, 2014, the ITC announced institution of an investigation. Trial is set for April 13-17, 2015, and the ITC has set the target date for the conclusion of the investigation as December 4, 2015.

In the Matter of Block Decoded Wordline Driver, Triple Well Charge Pump and Products Containing the Same, Landgericht Mannheim, Germany. 

On July 8, 2014, Macronix International Co., Ltd. filed a complaint in the District Court (or Lendgericht) in Mannheim, Germany, against Spansion LLC, Spansion International, Inc., Polycom GmbH, Harman Becker Automotive Systems GmbH and Ruckus Wireless Inc., for infringement of the German parts of European Patents EP 0 931 379 and EP 1 002 320. Macronix has requested permanent injunctive relief to prevent further infringing activity and seeks an accounting, a recall of infringing devices, reimbursement of costs of the proceedings and confirmation of the defendants’ liability for damages on the merits. Macronix further has requested that the District Court allow preliminary enforcement of the District Court’s decision upon the provision by Macronix of a security bond, should injunctive relief and cost reimbursement be awarded.

27

Spansion Inc.

Notes to Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Others

In addition to the above matters, the Company is a party to various legal actions that arose in the normal course of business. In the opinion of management, the aggregate liability, if any, with respect to all of these matters will not have a material adverse effect on the Company's financial condition, result of operations or cash flows.

17. Closure of Chapter 11 cases

Pursuant to the confirmation of the Plan of Reorganization on April 16, 2010, a claims agent was appointed to analyze and, at his discretion, contest outstanding disputed claims totaling $1.5 billion. On July 16, 2014, a final order was entered by the Bankruptcy Court closing all Chapter 11 cases. The Company recognized a gain of $3.2 million relating to reversal of its reserve for bankruptcy claims during the nine months ended September 28, 2014. This amount has been recorded within Interest income and other, net in the Condensed Consolidated Statement of Operations.

As of September 28, 2014, the Company had resolved all outstanding disputed claims and had distributed the 46,264,760 shares of the Company’s stock that were reserved for holders of allowed general unsecured claims.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements. These statements relate to future events or our future financial performance. Forward-looking statements may include words such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or other wording indicating future results or expectations. Forward-looking statements are subject to risks and uncertainties, and actual events or results may differ materially. Factors that could cause our actual results to differ materially include, but are not limited to, those discussed under “Part I, Item 1A. Risk Factors” in our 2013 Annual Report on Form 10-K, as filed with the SEC on February 25, 2014 and as amended by the Form 10-K/A filed with the SEC on July 8, 2014. These risks include our ability to: accurately forecast customer demand for our products; manage risks associated with our investment in new business strategies and acquisitions, such as our acquisition of the MCA business from Fujitsu; maintain our distribution relationships and channels in the future; manage risks associated with our global customer base and support structure; maintain and manage relations with third party manufacturers; maintain manufacturing efficiency; and protect our intellectual property and defend against infringement or other intellectual property claims. We encourage you to read that section of our Annual Report carefully. We undertake no obligation to revise or update any forward-looking statements to reflect any events or circumstances that arise after the date of this report, or to conform such statements to actual results or changes in our expectations.

Overview

We are a leading designer, manufacturer and developer of embedded systems semiconductors, which include flash memory, microcontrollers, mixed-signal, analog products and embedded system-on-chip solutions. Our leading-edge intellectual property and products are driving the development of high quality, reliable and economical devices that are high performing, intelligent, efficient and secure.

The embedded markets we focus on are transportation, industrial, consumer, communications and gaming. These markets require reliable flash memory solutions, microcontrollers, mixed-signal, analog and other programmable semiconductors that run applications in a broad range of electronic systems. The embedded markets are generally characterized by longer design and product life cycles, relatively stable pricing, more predictable supply-demand outlook and lower capital investments. Within this embedded industry, we serve a well-diversified customer base through a predominantly differentiated, non-commodity, service oriented model that strives to meet our customers’ needs. Our embedded solutions are incorporated in products manufactured by leading original equipment manufacturers (OEMs). We have many years of experience refining our product and service strategy to address market requirements and deliver high-quality products that go into a broad range of electronic applications such as automobiles, airplanes, set top boxes, games, telecommunications equipment, smart meters, factory automation and medical devices.

Our products are designed to accommodate various voltage, interface and density requirements for a wide range of applications and customer platforms. The majority of our NOR flash memory product designs are based on our proprietary two-bit-per-cell MirrorBit® technology, which has a simpler cell architecture, higher yields and lower costs than competing floating gate NOR flash memory technology. While we are most known for our NOR products, we are continuing to expand our portfolio in the areas of NAND flash memory, microcontroller, mixed-signal and analog products, as well as programmable system solutions or embedded system-on-chip solutions to broaden our customer engagement and bring differentiated products to embedded markets.

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In addition to product sales, we generate revenue by licensing our intellectual property to third parties and we assist our customers in developing and prototyping their designs by providing software and hardware development tools, drivers and simulation models for system-level integration.

Sale of Sunnyvale property and new headquarters lease

On January 23, 2014, we sold our property in Sunnyvale, California, consisting of 24.5 acres of land with approximately 471,000 square feet of buildings that include our headquarters building and submicron development center, a Pacific Gas & Electric transmission facility and a warehouse building, for net consideration of $58.9 million. We concurrently leased back approximately 170,000 square feet of the headquarters building on a month-to-month basis with the option to continue the lease for up to 24 months; thereafter, either party to the lease agreement can terminate the lease. The first six months of the lease are rent free. For accounting purposes, the rents relating to the rent-free period are assumed to have been netted against the sale proceeds and represent prepaid rent. Our rent-free use of this building constitutes continuing involvement by us as a lessee, and recognition of the sale of the property and the related gain is deferred until the lease period ends.

Due to our continuing involvement under the lease, the cash proceeds net of third-party costs, are recorded under the financing method as a short term financing obligation in accordance with the authoritative guidance on leases and sale of real estate. Interest is imputed on the financing obligation until such time as the sale can be recognized. The property continues to remain on our consolidated balance sheet and the buildings are being depreciated over their remaining useful life. After the rent-free period, beginning in the third quarter of fiscal 2014, a portion of the lease payments is recorded as a reduction to the financing obligation and the remainder is recognized as interest expense. As of September 28, 2014, $59.8 million was recorded in accrued liabilities and other as a financing obligation. We expect to recognize a gain of approximately $38.1 million on the sale of Sunnyvale property in the fourth quarter of fiscal 2014 when the lease ends. It will be recorded within interest income and other, net in the Consolidated Statement of Operations.

On May 22, 2014, we entered into a new headquarters lease for renting office space in San Jose, California. The lease is for a period of 12 years, with two options to extend for periods of five years each after the initial lease term. The initial term of the lease will commence on January 1, 2015 and expire on December 31, 2026.

Closure of Chapter 11 cases

Pursuant to the confirmation of the Plan of Reorganization on April 16, 2010, a claims agent was appointed to analyze and, at his discretion, contest outstanding disputed claims totaling $1.5 billion. On July 16, 2014, a final order was entered by the Bankruptcy Court closing all Chapter 11 cases. We recognized a gain of $3.2 million for the nine months ended September 28, 2014 relating to reversal of the reserve for bankruptcy claims. This has been recorded within interest income and other, net in the Condensed Consolidated Statement of Operations.

As of September 28, 2014, we had resolved all outstanding disputed claims and had distributed the 46,264,760 shares of stock that were reserved for holders of allowed general unsecured claims.

Critical Accounting Policies

Pension and Other Postretirement Benefits

In connection with our establishment of the Spansion Innovates Group Cash Balance Plan (an unfunded defined benefit plan), for the employees transferred as part of the MCA business, we adopted the relevant accounting guidance for defined benefit plans beginning in the fiscal quarter ended September 28, 2014. Defined benefit pension plans are accounted for on an actuarial basis, which requires the selection of various assumptions such as turnover rates, discount rates and other factors. The discount rate assumption is determined by comparing the projected benefit payments to the Japanese corporate bonds yield curve as of April 1, 2014.

30

The benefit obligation is the projected benefit obligation (PBO), which represents the actuarial present value of benefits expected to be paid upon retirement. This liability is recorded in other long term liabilities on the Condensed Consolidated Balance Sheets.

Net periodic pension cost is recorded in the Condensed Consolidated Statement of Operations and includes service cost. Service cost represents the actuarial present value of participant benefits earned in the current year. Interest cost represents the time value of money associated with the passage of time on the PBO. Gains or losses resulting from a change in the PBO if actual results differ from actuarial assumptions will be accumulated and amortized over the future life of the plan participants if they exceed 10% of the PBO.

Other Changes in Estimates or Accounting Policies

There have been no other significant changes in our critical accounting estimates or significant accounting policies during the nine months ended September 28, 2014 as compared to the discussion in Part II, Item 7 and in Note 2 to our consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 29, 2013, as filed with the SEC on February 25, 2014 and as amended by the Form 10-K/A filed on July 8, 2014.

Recent Accounting Pronouncements

In May 2014, the FASB issued an accounting standard update that provides for a new single revenue accounting model that will replace existing revenue recognition guidance. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which a Company expects to be entitled in exchange for those goods or services. The guidance becomes effective in the first quarter of our fiscal year ending December 31, 2017. We will have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard update. We are evaluating the impact that the standard update will have on our consolidated financial statements.

In August 2014, the FASB issued an accounting standard update relating to management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and on the related disclosures in the Notes. The update requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. The guidance is effective in the interim and annual periods beginning after December 15, 2016, with early application permitted.  The adoption of this update is not expected to have a material effect on our consolidated financial statements or disclosures.

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Results of Operations 

Comparison of Net Sales, Gross Profit, Research and Development expense, Sales, General and Administrative expense, Interest Income and Other, Net, Interest Expense and Provision for Income Taxes

The following is a summary of our operating results:

	Three Months Ended									Nine Months Ended
	September 28, 2014			September 29, 2013			Variance			September 28, 2014			September 29, 2013			Variance
	(in thousands, except for percentages)
Total net sales	$	315,930		$	273,378		$	42,552		$	942,346		$	658,020		$	284,326
Cost of sales		215,102			217,209			(2,107	)		658,864			498,640			160,224
Gross profit		100,828			56,169			44,659			283,482			159,380			124,102
Gross margin		31.9	%		20.5	%		11.4	%		30.1	%		24.2	%		5.9	%
Research and development		43,241			38,341			4,900			126,505			84,666			41,839
Sales, general and administrative		60,457			54,544			5,913			177,169			117,441			59,728
Restructuring charges		-			6,264			(6,264	)		-			6,264			(6,264	)
Operating loss		(2,870	)		(42,980	)		40,110			(20,192	)		(48,991	)		28,799
Interest income and other, net		453			3,578			(3,125	)		1,794			7,658			(5,864	)
Interest expense		(5,988	)		(7,351	)		1,363			(18,214	)		(22,333	)		4,119
Gain on acquisition of Microcontroller and Analog business		-			8,205			(8,205	)		-			8,205			(8,205	)
Provision (benefit) for income taxes		2,441			(1,644	)		4,085			8,703			(891	)		9,594

Net Sales

            Net sales increased by $42.5 million from $273.4 million for the three months ended September 29, 2013 to $315.9 million for the three months ended September 28, 2014. The increase in sales was primarily due to additional revenues of $50.0 million related to the MCA business which was acquired on August 1, 2013 and higher licensing revenues. We had one additional month of MCA business revenues in the three months ended September 28, 2014 compared to the three months ended September 29, 2013. Average selling prices also increased for both embedded flash solutions and the MCA business in the third quarter of fiscal 2014 compared to the third quarter of fiscal 2013. These increases were partially offset by lower revenues from patent sales of $12.5 million in the three months ended September 29, 2013 compared to the three months ended September 28, 2014.

Net sales increased by $284.3 million from $658.0 million for the nine months ended September 29, 2013 to $942.3 million for the nine months ended September 28, 2014. The increase was due to the inclusion of $324.7 million of revenues from the MCA business and higher licensing revenues, which were partially offset by a $51.4 million decrease in sales of embedded flash solutions. This decrease in sales of embedded flash solutions was due to lower revenues from consumer, transportation and industrial markets. The increase was also offset by patent sales of $12.5 million in the nine months ended September 29, 2013 compared to none in September 28, 2014. The average selling prices were higher in the nine months ended September 29, 2013 compared to the nine months ended September 29, 2014.

Geographically, revenue was derived from the following regions: 

	Three Months Ended										Nine Months Ended
	September 28, 2014					September 29, 2013					September 28, 2014					September 29, 2013
	Revenue ($ in thousands)		% of Revenue			Revenue ($ in thousands)		% of Revenue			Revenue ($ in thousands)		% of Revenue			Revenue ($ in thousands)		% of Revenue
Japan		89,463		28.4	%		70,820		25.9	%		306,613		32.5	%		151,465		23.0	%
Asia Pacific		121,471		38.4	%		99,332		36.3	%		324,984		34.5	%		242,735		36.9	%
Europe		47,425		15.0	%		41,284		15.1	%		145,750		15.5	%		116,631		17.7	%
Americas		24,694		7.8	%		26,659		9.8	%		72,709		7.7	%		74,778		11.4	%
Korea		21,120		6.7	%		15,349		5.6	%		60,773		6.4	%		37,498		5.7	%
Licensing, and other		11,757		3.7	%		19,934		7.3	%		31,517		3.4	%		34,913		5.3	%
Total		315,930		100.0	%		273,378		100.0	%		942,346		100.0	%		658,020		100.0	%

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Gross Profit

Our gross profit increased by $44.6 million from $56.2 million for the three months ended September 29, 2013 to $100.8 million for the three months ended September 28, 2014. Our gross margin as a percentage of sales increased from 20.5% in the three months ended September 29, 2013 to 31.9% in three months ended September 28, 2014. The increase in gross profit and gross margin percentage was primarily due to lower amortization of purchase accounting markup on the MCA business inventory purchased from Fujitsu Semiconductor Limited (FSL) as a part of our acquisition, additional revenues from the MCA business and higher internal fabrication facility utilization. These increases were partially offset by $12.5 million gross profit from patent sales in the third quarter of fiscal 2013 compared to none in fiscal 2014.

Our gross profit increased by $124.1 million from $159.4 million for the nine months ended September 29, 2013 to $283.5 million for the nine months ended September 28, 2014. Our gross margin as a percentage of sales increased from 24.2% in the nine months ended September 29, 2013 to 30.1% in the nine months ended September 28, 2014. The increase in gross profit and gross margin percentage was mainly due to revenues from MCA business, lower amortization of purchase accounting inventory markup, higher internal fabrication facility utilization and other efficiencies from our operations, and higher licensing revenues. The increase was partially offset by reduced profits from sales of embedded flash solutions in the nine months ended September 28, 2014, and the patent sales in fiscal 2013 compared to none in fiscal 2014. The reduced profits in embedded flash solutions was due to lower revenues from consumer, transportation and industrial markets and changes in product sales mix.

Research and Development (R&D)

R&D expenses increased by $4.9 million from $38.3 million for the three months ended September 29, 2013 to $43.2 million for the three months ended September 28, 2014. R&D expenses increased by $41.8 million from $84.7 million for the nine months ended September 29, 2013 to $126.5 million for the nine months ended September 28, 2014. These increases were mainly due to incremental R&D expenses relating to the MCA business for both three months and nine months ended September 28, 2014.

Sales, General and Administrative (SG&A)

SG&A expenses increased by $6.0 million from $54.5 million for the three months ended September 29, 2013 to $60.5 million for the three months ended September 28, 2014. The increase was mainly due to incremental SG&A expenses relating to the MCA business and $2.1 million of higher legal expenses on the Macronix patent infringement litigation.

SG&A expenses increased by $59.8 million from $117.4 million for the nine months ended September 29, 2013 to $177.2 million for the nine months ended September 28, 2014. The increase was mainly due to incremental SG&A expenses relating to the MCA business and $23.5 million higher legal expenses on the Macronix patent infringement litigation.

Interest income and other, net

Interest income and other, net decreased by $3.1 million from $3.6 million for the three months ended September 29, 2013 to $0.5 million for the three months ended September 28, 2014. The decrease is due to $9.6 million of gain on recovery of a previously impaired investment in the third quarter of fiscal 2013, compared to no such gain in the third quarter of fiscal 2014 and $2.1 million higher realized and unrealized loss on foreign currency transactions in the third quarter of fiscal 2014. In fiscal 2007, we entered into an agreement with a private company to develop and commercialize EcoRAM based memory solutions. We held investments in the private company in the form of a loan and shares of preferred stock of the private company. However based on subsequent evaluations of our investments in fiscal 2009 and fiscal 2010, we concluded that the private company was not likely to survive as a going concern and impaired our investments in the company. Beginning fiscal 2012, we observed certain positive developments with respect to the financial status of the private company and began seeking repayments from them, and in the third quarter of fiscal 2013 we recovered $9.6 million on our loan. We applied the accounting guidance relating to Investments-Debt and Equity Securities, which provides that realized gains and losses for held-to-maturity or available-for-sale securities are included in income and recognized $9.6 million of gain on recovery of impaired investments in the third quarter of fiscal 2013.

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The impact of this gain was partially offset by $7.6 million of costs relating to partial repurchase of the Senior Notes in the third quarter of fiscal 2013, as compared to no such costs in the third quarter of fiscal 2014 and $0.7 million recovery from impaired investments consisting of auction rate securities in the third quarter of fiscal 2014. We impaired these securities at various intervals between fiscal 2007 and fiscal 2010 based on our periodic analysis of discounted cash flows and the lack of a market for those securities. We received a refund on the principal portion of the investment in the second and third quarter of fiscal 2014.

Interest income and other, net, decreased by $5.9 million from $7.7 million for the nine months ended September 29, 2013 to $1.8 million for the nine months ended September 28, 2014. The decrease is due to the $9.6 million of gain on recovery of a previously impaired investment in fiscal 2013, compared to no such gain in fiscal 2014 and $3.2 million higher realized and unrealized loss on foreign currency transactions in fiscal 2014 and $2.4 million of gain on ineffective cash flow hedges in the second quarter of fiscal 2013, compared to no such event in fiscal 2014.  The decrease was partially offset by a gain of $3.2 million from the reversal of bankruptcy related reserves on final closure of the Chapter 11 cases, $2.5 million gain recognized relating to better than expected performance of the total fund assets in the pension plan, $2.8 million of lower costs incurred to repurchase $94.0 million of the remaining 7.875% Senior Notes, and $0.4 million of higher recovery from impaired investments consisting of auction rate securities  as discussed above.

Interest Expense

              Interest expense decreased by $1.4 million from $7.4 million for the three months ended September 29, 2013 to $6.0 million for the three months ended September 28, 2014 due to a lower interest expense on our debt. We fully redeemed the Senior Notes by the first quarter of fiscal 2014 and issued $150.0 million 2.0% Senior Exchangeable Notes due 2020 in the third quarter of fiscal 2013. The decrease in interest was partially offset by $0.6 million of imputed interest recorded in fiscal 2014 on the financing obligation relating to the sale of the Sunnyvale property.

Interest expense decreased by $4.1 million from $22.3 million for the nine months ended September 29, 2013 to $18.2 million for the nine months ended September 28, 2014 primarily due to lower interest expense on our debt. The decrease was partially offset by $1.6 million of imputed interest on the financing obligation relating to the sale of the Sunnyvale property in fiscal 2014.

Provision for Income Taxes

    We recorded an income tax expense of $2.4 million and an income tax benefit of $1.6 million for the three months ended September 28, 2014 and September 29, 2013, respectively. Our income tax expense was $8.7 million and an income tax benefit of $0.9 million for the nine months ended September 28, 2014 and September 29, 2013, respectively.

The tax expense for the three months and the nine months ended September 28, 2014 was primarily attributable to pre-tax income in foreign jurisdictions, withholding taxes related to the licensing revenues.

The tax benefit for the three months and nine months ended September 29, 2013 was primarily attributable to pre-tax income in foreign jurisdictions and withholding taxes related to the licensing revenues. This was offset by the release of reserves for uncertain tax positions in foreign locations and the tax impact from the Microcontroller and Analog business acquisition.

As of September 28, 2014, all of our U.S. deferred tax assets, net of deferred tax liabilities continue to be subject to a full valuation allowance. The valuation allowance is based on our assessment that it is more likely than not that the deferred tax assets will not be realizable in the foreseeable future.

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As of December 29, 2013, we had U.S. federal and state net operating loss carry forwards of approximately $1,016 million and $219.8 million, respectively. Approximately $489.7 million of the federal net operating loss carry forwards are subject to an annual limitation of $27.2 million. These federal and state net operating losses, if not utilized, expire from 2016 to 2033. We also have U.S. federal credit carryovers of $3.5 million which expire from 2020 to 2033. We also have state tax credits of $18.2 million, which includes California state tax credits of $17.5 million, which can be brought forward indefinitely.

If we were to undergo an “ownership change” for purposes of Section 382 of the Internal Revenue Code of 1986, as amended, our ability to utilize the unlimited federal net operating loss carry forwards could be limited under certain provisions of the Internal Revenue Code. As a result, we could incur greater tax liabilities than we would in the absence of such a limitation and any incurred liabilities could materially adversely affect our results of operations and financial condition.

Contractual Obligations

          The following table summarizes our contractual obligations at September 28, 2014:

	Payments due by period
	Total		2014		2015		2016		2017		2018		2019 and Beyond
	(in thousands)
Senior Secured Term Loan	$	297,750	$	750	$	22,900	$	3,000	$	3,750	$	3,000	$	264,350
Exchangeable Senior Notes	$	150,000		-		-		-		-		-		150,000
Interest expense on Debt	$	78,339		2,853		14,249		14,166		16,721		13,938		16,412
Other long term liabilities (1)	$	21,737		-		6,703		8,395		5,491		-		1,148
Operating leases (2)	$	55,458		2,183		6,809		8,401		5,967		4,768		27,330
Unconditional purchase commitments (3)	$	122,620		58,891		34,251		29,478		-		-		-
Total contractual obligations (4)	$	725,904	$	64,677	$	84,912	$	63,440	$	31,929	$	21,706	$	459,240

(1) Other long term liabilities consist of payment commitments under long term software license agreements with vendors and asset retirement obligations.

(2) Operating leases includes of payments relating to the new headquarters lease. The initial term of the lease will commence on January 1, 2015 and expire on December 31, 2026.

(3) Unconditional purchase commitments (UPC) include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. These agreements are principally related to inventory. UPCs exclude agreements that are cancelable without penalty.

(4) As of September 28, 2014, the liability for uncertain tax positions was $19.9 million, including interest and penalties. Due to the high degree of uncertainty regarding the timing of potential future cash flows associated with these liabilities, we are unable to make a reasonably reliable estimate of the amount and period in which these liabilities might be paid.

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2.00% Senior Exchangeable Notes due 2020

The net carrying amount of the liability component of 2.00% Senior Exchangeable Notes due 2020 (the Notes) consists of the following:

	September 28, 2014			September 29, 2013
	(in thousands)			(in thousands)
Principal amount	$	150,000		$	150,000
Unamortized debt discount		(34,765	)		(39,391	)
Net carrying value	$	115,235		$	110,609

The following table presents the interest expense recognized on the Notes:

	Three Months Ended		Nine Months Ended		Three and Nine Months Ended
	September 28, 2014		September 28, 2014		September 29, 2013
	(in thousands)
Contractual interest expense at 2% per annum	$	746	$	2,230	$	290
Amortization of debt issuance costs		130		391		50
Accretion of debt discount		1,185		3,502		432
Total	$	2,061	$	6,123	$	772

Capped Calls

In connection with the issuance of the Notes, we entered into capped call transactions with certain bank counterparties to reduce the potential dilution to our common stock upon exchange of the Notes. The capped call transactions have a strike price of approximately $13.87 and a cap price of approximately $18.14, and are exercisable when and if the Notes are converted. If, upon conversion of the Notes, the price of our common stock is above the strike price of the capped calls, the counterparties will deliver shares of our common stock and/or cash with an aggregate value approximately equal to the difference between the price of our common stock at the conversion date (as defined, with a maximum price for purposes of this determination equal to the cap price) and the strike price, multiplied by the number of shares of our common stock related to the capped call transactions being exercised. The capped call transactions expire on September 1, 2020.

7.875% Senior Notes due 2017

On January 21, 2014, we redeemed the remaining approximately $94.1 million aggregate principal amount outstanding of the 7.875% Senior Notes due 2017 at a redemption price that was 103.938% of their face value. We paid an aggregate amount of $99.1 million, including redemption price, accrued and unpaid interest, and repurchase premium. Loss on redemption of the Senior Notes of $4.8 million was recorded within interest and other income (expense), net. We redeemed these Senior Notes with the proceeds from the issuance of the 2.00% Senior Exchangeable Notes due 2020.

2012 Revolving Credit Facility

As of September 28, 2014, we were in compliance with all of the 2012 Revolving Credit Facility’s covenants. However, drawdown under the 2012 Revolving Credit Facility requires that we meet or obtain a waiver to certain conditions including the senior secured leverage ratio not to exceed 2.75:1.00 and compliance with coverage and leverage ratios, as of the last day of the most recently ended fiscal quarter. Based on our operating results for the three months ended September 28, 2014, we do not meet the maximum leverage ratio limit. We have not obtained a waiver for those conditions; accordingly we are not able to draw down on the 2012 Revolving Credit Facility. We did not need to draw on the revolving line of credit during the three months ended September 28, 2014 and believe that our sources of cash and liquidity are sufficient to meet the business requirements for the next 12 months.

We are in compliance of all covenants under the 2.00% Senior Exchangable Notes and the Term Loan as of September 28, 2014.

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Liquidity and Capital Resources

We believe our sources of cash and liquidity are sufficient to meet our business requirements for the next 12 months, including capital expenditures for worldwide manufacturing and assembly and working capital requirements.

Cash Requirements

As of September 28, 2014 and December 29, 2013, we had the following cash and cash equivalents and short term investments:

	September 28, 2014		December 29, 2013
	(in thousands)
Cash	$	280,421	$	282,163
Money market funds		1,010		3,906
Certificates of deposit		24,266		11,383
Time deposits		21,072		14,045
Total cash and cash equivalents and short-term investments	$	326,769	$	311,497

Key components of our cash flow during the nine months ended September 28, 2014 and September 29, 2013 were as follows:

	Nine Months Ended
	September 28, 2014			September 29, 2013
	(in thousands)
Net cash provided by operating activities	$	81,627		$	70,543
Net cash used for investing activities		(52,442	)		(160,223	)
Net cash used for financing activities		(32,545	)		20,760
Effect of exchange rate changes on cash and cash equivalents		(718	)		(232	)
Net decrease in cash and cash equivalents	$	(4,078	)	$	(69,152	)

Operating Activities

Net cash provided by operating activities was $81.6 million during the nine months ended September 28, 2014, which consisted of net loss of $45.3 million and net increase in operating assets and liabilities of $31.0 million and net non-cash items of approximately $96.0 million. The net increase in operating assets and liabilities was primarily due to an increase of $31.7 million in accounts payable, accrued liabilities and accrued compensation and benefits, a decrease of $13.2 million in account receivable and an increase of $7.5 million in deferred income. This was partially offset by an increase of $15.1 million in inventories and an increase of $9.1 million in other assets. Net non-cash items primarily consisted of $80.5 million in depreciation and amortization, and $25.1 million of stock compensation expense.

Net cash provided by operating activities was $70.5 million during the nine months ended September 29, 2013, which consisted of net loss of $54.6 million and net increase in operating assets and liabilities of $60.3 million and net non-cash items of approximately $64.8 million. The net increase in operating assets and liabilities was due to an increase of $93.4 million in accounts payables, accrued liabilities and accrued compensation and benefits, a decrease of $27.1 million in inventory and an increase of $18.0 million in deferred income, offset by an increase of $45.8 million in accounts receivables and an increase of $30.3 million in other long term assets. Net non-cash items primarily consisted of $65.1 million in depreciation and amortization, $23.3 million of stock compensation expense $9.6 million gain on recovery from impaired investment and $8.2 million gain on the acquisition of the MCA Business.

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Investing Activities

Net cash used for investing activities was $52.4 million during the nine months ended September 28, 2014, primarily comprised of $37.8 million used to purchase marketable securities and $34.9 million used to purchase property, plant and equipment, which were offset by $18.5 million in proceeds from the maturities of marketable securities.

Net cash used for investing activities was $160.2 million during the nine months ended September 29, 2013, primarily comprised of $148.1 million used for acquisition of the MCA Business net of cash acquired, $100.5 million used to purchase marketable securities and $42.8 million used to purchase property, plant and equipment, offset by $116.9 million in proceeds from the maturities of marketable securities.

Financing Activities

Net cash used for financing activities was $32.5 million during the nine months ended September 28, 2014, primarily due to payments of $105.7 million on financing arrangements, offset by $58.9 million of proceeds from sale of our Sunnyvale building and $14.2 million of proceeds from the issuance of common stock upon the exercise of stock options.

Net cash provided by financing activities was $20.8 million during the nine months ended September 29, 2013, primarily due to $145.5 million of proceeds from the issuance of the Notes, net of costs, offset by $106.8 million of partial repurchase of the Senior Notes and $15.4 million of purchase of capped call for the Notes.

Off-Balance Sheet Arrangements

Indemnification Obligations

During the normal course of business, we make certain indemnities and commitments under which we may be required to make payments in relation to certain transactions. These indemnities include non-infringement of patents and intellectual property, indemnities to our customers in connection with the delivery, design, manufacture and sale of our products, indemnities to our directors and officers in connection with legal proceedings, indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, and indemnities to other parties to certain acquisition agreements. The duration of these indemnities and commitments varies, and in certain cases, is indefinite. We believe that substantially all of our indemnities and commitments provide for limitations on the maximum potential future payments we could be obligated to make. However, we are unable to estimate the maximum amount of liabilities related to our indemnities and commitments because such liabilities are contingent upon the occurrence of events, which are not reasonably determinable.

As of September 28, 2014, we did not have any other significant off-balance sheet arrangements, as that term is defined in Item 303(a) (4) (ii) of Regulation S-K, promulgated under the Securities Exchange Act of 1934, as amended.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates primarily to our cash deposits, invested cash and debt. As of September 28, 2014, we had $280.4 million held in demand deposit accounts, $1.0 million held in overnight money market funds, $24.3 million invested in certificates of deposit most of which were insured by the FDIC and $21.1 million held in time deposits. Our cash and short-term investment position is highly liquid. Of our total cash and short-term investments, approximately $281.4 million have maturity terms of 0 to 30 days, $0.6 million have maturity terms of 31 to 90 days, $4.8 million have maturity terms of 91 to 180 days, and the remaining $40.0 million have maturity terms of 181 to 365 days at the time of purchase. While our interest income fluctuates with short-term market conditions, we believe our exposure to interest rate risk is minimal due to the short term nature of our cash and investment position.

Interest on the Notes is fixed and interest on our Term Loan is at a variable rate. The Term Loan has a LIBOR floor of 0.75 percent. When LIBOR is below 0.75 percent, our interest expense will not change with movements in interest rate environment. When LIBOR is above 0.75 percent, changes in interest rates associated with the Term Loan will then result in a change to our interest expense. For example, a one percent aggregate change in interest rates would change our contractual interest expense by approximately $2.9 million annually.

Default Risk

We intend to actively monitor market conditions and developments specific to the securities and classes of securities in which we invest. We take a conservative approach to investing our funds. Our policy is to invest only in highly-rated securities with relatively short maturities.

Foreign Exchange Risk

Our sales, expenses, assets and liabilities denominated in Japanese yen and other foreign currencies are exposed to foreign currency exchange rate fluctuations. For example,

● some of our manufacturing costs are denominated in Japanese yen and other foreign currencies such as the Thai baht and Malaysian ringgit;

● sales of our products to Fujitsu are denominated in U.S. dollars, Japanese yen and Euros; and

● some of our fixed asset purchases and sales are denominated in foreign currencies.

Consequently, movements in exchange rates could cause our net sales and our expenses to fluctuate, affecting our profitability and cash flows. We use foreign currency forward contracts to reduce our foreign exchange exposure on our foreign currency denominated assets and liabilities. We also hedge a percentage of our forecasted revenue and expenses denominated in Japanese yen with foreign currency forward contracts. The objective of these contracts is to mitigate the impact of foreign currency exchange rate movements on our operating results. We do not use these contracts for speculative or trading purposes.

We evaluate hedge effectiveness at the inception of the hedge prospectively, as well as retrospectively and record any ineffective portion of the hedging instruments in interest income and other, net in our Condensed Consolidated Statements of Operations.

We do not anticipate any material adverse effect on our consolidated financial position, results of operations or cash flows resulting from the use of these instruments in the future, including the impact of counterparty non-performance. However, we cannot assure that these strategies will be effective or that transaction losses can be minimized or forecasted accurately, or that these activities will eliminate foreign currency exchange rate exposure. In particular, we generally cover only a portion of our foreign currency exchange exposure. Failure to eliminate or mitigate our exposure to foreign currency exchange rate fluctuations could have an adverse effect on our business, financial condition and results of operations.

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The following table provides information about our foreign currency forward contracts as of September 28, 2014 and December 29, 2013:

	September 28, 2014							December 29, 2013
	Notional Amount			Average Contract Rate Per USD	Estimated Fair Value			Notional Amount			Average Contract Rate Per USD	Estimated Fair Value
	(in thousands, except contract rates)
Non-Designated hedges
Buy JPY / Sell USD	$	6,756	¥	108.90	$	(27.0	)	$	28,232	¥	104.31	$	(226.0	)
Sell JPY / Buy USD	$	11,718	¥	108.90	$	51.5		$	41,994	¥	96.36	$	3,493.0
Sell EUR / Buy USD	$	33,939	€	0.78	$	266.4		$	23,446	€	0.73	$	(87.0	)
Designated hedges
Sell JPY / Buy USD	$	72,531	¥	103.85	$	3,610.2		$	-	¥	-	$	-
Buy JPY / Sell USD	$	116,021	¥	107.43	$	(1,983.0	)	$	-	¥	-	$	-

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ITEM 4. CONTROLS AND PROCEDURES

         Based on our management’s evaluation (with the participation of our principal executive officer and principal financial officer), as of the end of the period covered by this report, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act)) are effective at the reasonable assurance level to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

          There were no changes in our internal control over financial reporting during the three months ended September 28, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

For a description of our material legal proceedings, see note 16 “Commitments and Contingencies” in the notes to the condensed consolidated financial statements, which is incorporated herein by reference.

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ITEM 1A. RISK FACTORS

In addition to the cautionary information included in this report, you should carefully consider the factors discussed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 29, 2013, as filed with the SEC on February 25, 2014 andas amended by the Form 10-K/A filed on July 8, 2014, which could materially adversely affect our business, financial condition and/or results of operations. These risk factors do not identify all risks that we face. Our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations.

ITEM 6. EXHIBITS

Exhibit Number	Description of Exhibits
10.1*+	Amended U.S. and Non-US Employees Form of Restricted Stock Unit Award and Terms and Conditions for Awards under the Spansion Inc. 2010 Equity Incentive Award Plan, as amended.
31.1*	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

_____________________________

+	Management agreement or compensation plan.
*	Filed herewith.
**	Furnished herewith. Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SPANSION INC.
Date: November 6, 2014	By:	/s/ Randy W. Furr
		Randy W. Furr
		Corporate Executive Vice President and Chief Financial Officer

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EX-10

EXHIBIT 10.1

SPANSION INC.

2010 EQUITY INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT AWARD

The following sets forth the terms of your Spansion Inc. Restricted Stock Unit (“RSU”) Award:

Employee Name:
Stock ID:
Grant Number:
Grant Date:
Number of Shares
Vesting Schedule and Payment Date:	Subject to acceleration in certain circumstances, the RSUs vest and are paid on the following dates (each a “Payment Date”):
	Shares	Date

The Restricted Stock Unit Award that is described and made pursuant to this Restricted Stock Unit Award (this “Award”) is issued under the Spansion Inc. 2010 Equity Incentive Award Plan (as amended from time to time, the “Plan”). By not electronically rejecting this Award within 30 days after the date of the electronic mail notification to you of the grant of this Award (the “Electronic Notification Date”), you agree to be bound by the terms and conditions herein, the Plan and all conditions established by the Company in connection with awards issued under the Plan.

The following terms and conditions apply to the RSUs granted pursuant to this Award:

Company; Defined Terms:	“Company” shall mean Spansion Inc., and, except as the context may otherwise require, references to “Company” shall be deemed to include its subsidiaries and affiliates. To the extent not defined herein, capitalized terms shall have the meanings ascribed to them in the Plan.
Type of Award:	Restricted Stock Units, or RSUs. The RSUs entitle the Holder to receive an equal number of shares of Common Stock at settlement, as described below.
Brokerage Account Requirement	As a condition to the grant of the RSUs, the Holder agrees to open and maintain a brokerage account at the Company’s designated stock broker at all times that the RSUs remain outstanding.
Vesting and Settlement:	The RSUs shall vest and become payable according to the schedule set forth above; provided, however, that the RSUs will vest and be paid on such dates only if the Holder has not had a Termination of Service prior to the applicable Payment Date. All unvested RSUs will be forfeited upon Termination of Service. Vested RSUs shall be settled through the issuance of shares of Common Stock to the Holder equal to the number of RSUs to be settled and paid. The issuance of shares of Common Stock will be subject to tax withholding, as provided below.
Transferability of RSUs:	RSUs may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, provided that in the event of the Holder’s death, shares deliverable or amounts payable with respect to the RSUs shall be delivered or paid, as applicable, to the Holder’s designated beneficiary. The Administrator will advise Holders with respect to the procedures for naming and changing designated beneficiaries.
Tax Withholding:	Unless another method for the payment of applicable tax withholding obligations is elected at least two days before the Payment Date, the Holder agrees to sell that number of shares of Common Stock necessary to provide proceeds in an amount equal to the tax withholding obligations and instruct the broker to pay the proceeds to the Company. Alternatively, if required or if designated by the Holder, the Company may deduct from the Holder’s paycheck within a reasonable time following each Payment Date the minimum amount required to satisfy any applicable tax withholding obligations with respect to the issuance of shares of Common Stock on such Payment Date. Finally, the Holder may also satisfy tax withholding obligations by depositing cash in an amount equal to the tax withholding obligations in the Holder’s brokerage account designated by the Company and instructing the broker to pay such cash amount to the Company. The Holder is encouraged to consult with a tax advisor regarding the tax consequences of participation in the Plan and acceptance of this Award.

2

Rights as a Stockholder:	Until the shares of Common Stock are issued and delivered, a Holder will have no rights as a stockholder with respect to the shares of Common Stock subject to the RSU.
No Right to Continued Employment:	Neither the RSUs nor this Agreement confers upon the Holder any right to continue to be an employee of the Company or any of its subsidiaries or interferes in any way with the right of the Company or any of its subsidiaries to terminate the Holder’s employment at any time.
Additional Terms for Holders Providing Services Outside the United States:	To the extent Holder provides services to the Company in a country other than the United States, the RSUs shall be subject to such additional or substitute terms as shall be set forth for such country in Exhibit A attached hereto, including any sub-plans referenced therein.
Data Privacy:	By acceptance of this Award, the Holder acknowledges and consents to the collection, use, processing and transfer of personal data as described below. The Company, its affiliates and the Holder’s employer hold certain personal information, including the Holder’s name, home address and telephone number, date of birth, social security number or other employee tax identification number, salary, nationality, job title, and any equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder’s favor, for the purpose of managing and administering the Plan (“Data”). The Company and its affiliates will transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the United States, the European Economic Area, or elsewhere. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan on behalf of the Holder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affect the Holder’s ability to participate in the Plan and receive the benefits intended by this Award.

3

No impact on other rights. Participation in the Plan is voluntary. The value of the RSUs is an extraordinary item of compensation outside the scope of Holder’s normal employment and compensation rights, if any. As such, the RSUs are not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pensions or retirement benefits or similar payments unless specifically and otherwise provided in the plans or agreements governing such compensation. The Plan is discretionary in nature and may be amended, cancelled, or terminated by the Company, in its sole discretion, at any time. The grant of RSUs under the Plan is a one-time benefit and does not create any contractual or other right to receive any other grant of RSUs or other awards under the Plan in the future. Future grants, if any, will be at the sole discretion of the Company, including, but not limited to, the timing of the grant, the form of award, number of shares of Common Stock subject to an award, vesting, and exercise provisions, as relevant.

4

EXHIBIT A

TO SPANSION INC.

2010 EQUITY INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT AWARD

This Exhibit A to the Spansion Inc. 2010 Equity Incentive Award Plan (the “Plan”) Restricted Stock Unit Award (“Award”) includes special terms and conditions applicable to Holders in the countries below. These terms and conditions are in addition to or substitute for, as applicable, those set forth in the Award. Any capitalized term used in this Exhibit A without definition shall have the meaning ascribed to such term in the Plan or the Award, as applicable.

Each Holder is advised to seek appropriate professional advice as to how the relevant exchange control and tax laws in the Holder’s country may apply to the Holder’s individual situation.

CHINA

Limitations on Common Stock Issuance. Due to local exchange control regulations, the Holder is required to immediately sell all shares upon issuance using a broker who, upon issuance of the shares of Common Stock upon vesting of the RSUs will simultaneously sell all of the shares of Common Stock that the Holder is entitled to receive upon such issuance, use the proceeds to pay any Tax-Related Items (as defined below) to the Company and remit the balance to the Holder in cash. Depending on the development of local laws, the Company reserves the right to provide additional settlement methods for the Holder prior to vesting.

Responsibility for Taxes. Regardless of any action the Company takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), the Holder acknowledges that the ultimate liability for all Tax-Related Items legally due by Holder is and remains his or her responsibility and that the Company (1) makes no representations or undertaking regarding treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant, vesting or settlement of the RSUs, or sale of shares of Common Stock issued pursuant to such settlement; and (2) does not commit to structure the terms of the grant or any aspect of the Award to reduce or eliminate the Holder’s liability for Tax-Related Items. Prior to vesting of the RSUs, the Holder shall make adequate arrangements satisfactory to the Company to satisfy all withholding and payment on account obligations of the Company. In this regard, the Holder authorizes the Company to withhold all applicable Tax-Related Items legally payable by Holder from Holder’s wages or other cash compensation paid to Holder by the Company or from proceeds of the sale of the shares of Common Stock. Alternatively, or in addition, the Company may sell or arrange for the sale of shares of Common Stock to meet the withholding obligation for Tax-Related Items.

FINLAND

No country-specific Award terms apply.

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FRANCE

Sub-Plan.

The Award shall be deemed granted under and subject to the terms of the 2010 Equity Incentive Award Plan French Sub-Plan – Restricted Stock/Restricted Stock Units (the “French Sub-Plan”), or to have been granted outside the Sub-Plan, as indicated below:

[  ]  Grant made under the French Sub-Plan

[  ]  Grant not made under the French Sub-Plan

Data Privacy.

This provision replaces the “Data Privacy” section of the Award.

By acceptance of this Award, the Holder acknowledges and consents to the collection, use, processing and transfer of personal data as described below. The Company, its affiliates and the Holder’s employer hold certain personal information, including the Holder’s name, home address and telephone number, date of birth, social security number or other employee tax identification number, employment history and status, salary, nationality, job title, and any equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder’s favor, for the purpose of managing and administering the Plan (“Data”). The Company and its affiliates will transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. Currently, the third party is E*Trade Financial Outsourcing Group, 4005 Windward Plaza Drive, Alpharetta, GA 30005, however the Company may retain additional or different third parties for any of the purposes mentioned. The Company may also make the Data available to public authorities where required under locally applicable law. These recipients may be located in the United States, the European Economic Area, or elsewhere, which the Holder separately and expressly consents to, accepting that outside the European Economic Area, data protection laws may not be as protective as within. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan on behalf of the Holder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company through its local H.R. Director; however, withdrawing the consent may affect the Holder’s ability to participate in the Plan and receive the benefits intended by this Award. Data will only be held as long as necessary to implement, administer and manage the Holder’s participation in the Plan and any subsequent claims or rights.

French Language Provision. By accepting this Award, Holder confirms having read and understood the documents relating to the Plan which were provided to Holder in the English language. Holder accepts the terms of those documents accordingly.

French translation: En acceptant ce Contrat vous confirmez ainsi avoir lu et compris les documents relatifs au Plan qui vous ont été communiqués en langue anglaise. Vous en acceptez les termes en connaissance de cause.

6

GERMANY

Acceptance of Award. Notwithstanding the terms of the Award, a Holder must acknowledge and accept the Award by signing a copy of the Award and returning the original signed document within 30 days after the date of the electronic mail notification of the Award document. For the avoidance of doubt, this Award cannot be accepted electronically. Please sign and return the Award to: __________________________________________________.

No Impact on Other Rights. The grant of RSUs under the Plan is a one-time benefit and does not create any contractual or other right to receive any other grant of RSUs or other awards under the Plan in the future.

Consent to Personal Data Processing and Transfer.

This provision replaces the “Data Privacy” section of the Award.

By acceptance of this Award, the Holder acknowledges and consents to the collection, use, processing and transfer of personal data as described below. The Company and the Holder’s employer hold certain personal information, including the Holder’s name, home address and telephone number, date of birth, social security number or other employee tax identification number, salary, nationality, job title, and any equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder’s favor, for the purpose of managing and administering the Plan (“Data”). The Company and the Holder’s employer will transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan, at the time being E*Trade Financial Outsourcing Group, 4005 Windward Plaza Drive, Alpharetta, GA 30005. These recipients are located in the European Economic Area, but also outside and in so-called insecure third-party countries that do not guarantee the data privacy protection level of the European Economic Area, for example the United States. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan on behalf of the Holder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affect the Holder’s ability to participate in the Plan and receive the benefits intended by this Award.

INDIA

No country-specific Award terms apply.

ISRAEL

Sub-Plan. The Award shall be deemed granted under and subject to the terms of the 2010 Equity Incentive Award Plan Sub-Plan – Israel (the “Sub-Plan”). Capitalized terms not otherwise defined herein or in the Plan shall have the meanings ascribed in the Sub-Plan.

7

Acceptance of Award. Notwithstanding the terms of the Award, a Holder must acknowledge and accept the Award by signing a copy of the Award document and returning the original signed document to ______________________________________________ within 30 days after the date of the electronic mail notification of this Award document, and hereby acknowledges and agrees to the following:

The Award is granted under and governed by the Plan (including the Sub-Plan), Section 102(b)(2) of the Income Tax Ordinance (New Version) – 1961 and the Rules promulgated in connection therewith (“Section 102”) and the Trust Agreement.

● The shares of Common Stock issued upon vesting of the RSUs will be issued to the Trustee to hold on Holder’s behalf, pursuant to the terms of Section 102 and the Trust Agreement.

● Holder is familiar with the terms and provisions of Section 102, particularly the Capital Gains Track described in subsection (b)(2) thereof, and agrees that Holder will not require the Trustee to release or sell the RSUs or underlying shares of Common Stock during the Restricted Holding Period, unless permitted to do so by applicable law.

Data Privacy.

This provision replaces the “Data Privacy” section of the Award.

By acceptance of this Award, the Holder acknowledges and consents to the collection, use, processing and transfer of personal data as described below. The Company, its affiliates and the Holder’s employer hold certain personal information, including the Holder’s name, home address and telephone number, date of birth, social security number or other employee tax identification number, salary, nationality, job title, and any equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder’s favor, for the purpose of managing and administering the Plan (“Data”). The Company and its affiliates will transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the United States, the European Economic Area, or elsewhere. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan on behalf of the Holder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan, including transfers outside of Israel and further transfers thereafter. The Holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affect the Holder’s ability to participate in the Plan and receive the benefits intended by this Award.

8

ITALY

Data Privacy Notice and Consent.

This provision replaces the “Data Privacy” section of the Award.

Holder hereby explicitly and unambiguously consents to the collection, use, processing and transfer, in electronic or other form, of personal data as described in this section of Exhibit A by and among, as applicable, the Company and any Subsidiary for the exclusive purpose of implementing, administering and managing Holder’s participation in the Plan.

Holder understands that the Company and any Subsidiary may hold certain personal information about Holder, including but not limited to, Holder’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of the RSUs or any other entitlement to shares of Common Stock awarded, canceled, exercised, vested, unvested or outstanding in Holder’s favor, for the exclusive purpose of managing and administering the Plan (“Personal Data”).

Holder also understands that providing the Company with Personal Data is necessary for the performance of the Plan and that Holder’s denial to provide Personal Data would make it impossible for the Company to perform its contractual obligations and may affect Holder’s ability to participate in the Plan. The Controller of Personal Data processing is Spansion Inc., with registered offices at 915 DeGuigne Drive, P.O. Box 3453, Sunnyvale, California 94088, United States of America, and, pursuant to Legislative Decree no. 196/2003, its representative is ________________________________________________.

Holder understands that Personal Data will not be publicized, but it may be transferred to banks, other financial institutions or brokers involved in the management and administration of the Plan. Holder further understands that the Company and/or a Subsidiary will transfer Personal Data amongst themselves as necessary for the purpose of implementation, administration and management of Holder’s participation in the Plan, and that the Company and/or a Subsidiary may each further transfer Personal Data to third parties assisting the Company in the implementation, administration and management of the Plan, including any requisite transfer of Personal Data to a broker or other third party with whom Holder may elect to deposit any Shares acquired under the Plan. Such recipients may receive, possess, use, retain and transfer Personal Data in electronic or other form, for the purposes of implementing, administering and managing Holder’s participation in the Plan. Holder understands that these recipients may be located in or outside the European Economic Area, such as in the United States or elsewhere. Should the Company exercise its discretion in suspending all necessary legal obligations connected with the management and administration of the Plan, it will delete Personal Data as soon as it has accomplished all the necessary legal obligations connected with the management and administration of the Plan.

Holder understands that Personal Data processing related to the purposes specified above shall take place under automated or non-automated conditions, anonymously when possible, that comply with the purposes for which Personal Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to Legislative Decree no. 196/2003.

The processing activity, including communication, the transfer of Personal Data abroad, including outside of the European Economic Area as specified herein and pursuant to applicable laws and regulations, does not require Holder’s consent thereto as the processing is necessary to performance of contractual obligations related to implementation, administration and management of the Plan. Holder understands that, pursuant to Section 7 of the Legislative Decree no. 196/2003, Holder has the right to, including but not limited to, access, delete, update, correct or stop, for legitimate reason, the Personal Data processing. Furthermore, Holder is aware that Personal Data will not be used for direct marketing purposes. In addition, Personal Data provided can be reviewed and questions or complaints can be addressed by contacting Holder’s human resources department.

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JAPAN

Data Privacy.

This provision replaces the “Data Privacy” section of the Award.

By acceptance of this Award, the Holder acknowledges and consents to the collection, use, processing and transfer of personal data as described below. The Company, and the Holder’s employer hold the following personal information for the purpose of managing and administering the Plan (“Data”): the Holder’s name, home address and telephone number, date of birth, social security number or other employee tax identification number, salary, nationality, job title, and any equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder’s favor. From time to time, the Company may change the scope of its affiliates that hold, use or process Holder’s personal information or the scope of Holder’s personal information to be held, used or processed by the Company, its affiliates and the Holder’s employer, by providing, or made easily accessible, information about such change to the Holder. The Company and its affiliates will transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the United States, the European Economic Area, or elsewhere. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan on behalf of the Holder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affect the Holder’s ability to participate in the Plan and receive the benefits intended by this Award.

KOREA

No country-specific Award terms apply.

10

MALAYSIA

This provision replaces the “Data Privacy” section of the Award.

By acceptance of this Award, the Holder acknowledges and consents to the collection, use, processing and transfer of personal data as described below. The Company, its affiliates and the Holder’s employer hold certain personal information from the Holder’s employee records, including the Holder’s name, home address and telephone number, date of birth, social security number or other employee tax identification number, salary, nationality, job title, and any equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder’s favor, for the purpose of managing and administering the Plan (“Data”). The Company and its affiliates will transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan and will disclose certain Data to the Inland Revenue Board and other relevant authorities as required by law. These recipients may be located in the United States, the European Economic Area, Malaysia or elsewhere. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan on behalf of the Holder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan. The Data will be retained by the Company, its affiliates and the Holder’s employer for the entire duration of the Holder’s employment and for a further seven years after cessation of employment. The Holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting _____________________________________.

Disclosure of Data is obligatory for the implementation, administration and management of the Plan; however, withdrawing the consent may affect the Holder’s ability to participate in the Plan and receive the benefits intended by this Award.

SINGAPORE

No country-specific Award terms apply.

SWEDEN

No country-specific Award terms apply.

TAIWAN

No country-specific Award terms apply.

THAILAND

No country-specific Award terms apply.

11

THE NETHERLANDS

Data Privacy.

This provision replaces the “Data Privacy” section of the Award.

By acceptance of this Award, the Holder acknowledges and consents to the collection, use, processing and transfer of personal data as described below. The Company, its affiliates and the Holder’s employer hold certain personal information, including the Holder’s name, home address and telephone number, date of birth, citizen service number (burgerservicenummer) (former social security number) or other employee tax identification number (insofar as allowed), salary, nationality, job title, and any equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder’s favor, for the purpose of managing and administering the Plan (“Data”). The Company and its affiliates will transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. Currently, the third parties are E*Trade Financial Outsourcing Group, 4005 Windward Plaza Drive, Alpharetta, GA 30005, however the Company may retain additional or different third parties for any of the purposes mentioned. These recipients may be located in the United States, the European Economic Area, or elsewhere. Countries outside the European Economic Area do not provide for a similar level of data protection as within the European Economic Area pursuant to the European Data Protection Directive 95/46/EC. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan on behalf of the Holder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affect the Holder’s ability to participate in the Plan and receive the benefits intended by this Award. The Holder understands that he or she may request a list of the names and addresses of the third party recipients of Data by contacting the Company through its local H.R. Representative at Spansion International, Attn: ______________________________.

UNITED KINGDOM

Eligible Individual. For the purpose of RSUs awarded in the UK, only Employees are Eligible Individuals.

Tax Withholding.

The following is added to the “Tax Withholding” section of the Award.

The Holder will be liable for and agrees to indemnify and keep indemnified the Company, any subsidiary and his/her employing company, if different, from and against any liability for or obligation to pay any Tax Liability (a “Tax Liability” being any liability for income tax, employee’s National Insurance contributions and, at the discretion of the Company, employer’s National Insurance Contributions) that is attributable to (i) the grant or vesting of, or any benefit derived by the Holder from, the RSUs, (ii) the acquisition by the Holder of the Common Stock on the settlement of the RSUs, or (iii) the disposal of any Common Stock.

At the discretion of the Company, the RSUs will not vest until the Holder has entered into an election with the Company (or his/her employer) (as appropriate) in a form approved by the Company and Her Majesty’s Revenue & Customs (a “Joint Election”) under which any liability of the Company and/or the employer for employer’s National Insurance contributions arising in respect of the granting, vesting, settlement of or other dealing in the RSUs, or the acquisition of Common Stock on settlement of the RSUs, is transferred to and met by the Holder.

The RSUs will not vest until the Holder has made such arrangements as the Company may require for the satisfaction of any Tax Liability that may arise in connection with the vesting or settlement of the RSUs and/or the acquisition of the Common Stock by the Holder. The Company shall not be required to issue, allot or transfer Common Stock until the Holder has satisfied this obligation.

No Right to Continued Employment.

12

This provision replaces the “No Right to Continued Employment” section of the Award.

Neither the RSUs nor this Agreement:

(i) confers upon the Holder any right to continue to be an employee of the Company or any of its subsidiaries or interferes in any way with the right of the Company or any of its subsidiaries to terminate the Holder’s employment at any time; or

(ii) forms part of the Holder’s entitlement to remuneration and benefits in terms of his/her employment, or affects the Holder’s terms and conditions of employment.

Data Privacy.

This provision replaces the “Data Privacy” section of the Award.

By acceptance of this Award, the Holder acknowledges and consents to the collection, use, processing and transfer of personal data as described below. The Company, its affiliates and the Holder’s employer hold certain personal information (including sensitive personal information) such as the Holder’s name, home address and telephone number, date of birth, social security number or other employee tax identification number, salary, nationality, job title, and any equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder’s favor, for the purpose of managing and administering the Plan (“Data”). By participating in the Plan, the Holder agrees that the Company and its affiliates may hold and process such Data, and may transfer Data to any third parties assisting the Company or its affiliates in the implementation, administration and management of the Plan. These recipients may be located in the United States, the European Economic Area, or elsewhere. The Holder hereby authorizes them to receive, possess, process, use, hold, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan and in the course of the Company’s business, including any requisite transfer of such Data as may be required for the administration of the Plan on behalf of the Holder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affect the Holder’s ability to participate in the Plan and receive the benefits intended by this Award.

13

EX-31

Exhibit 31.1

Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John H. Kispert, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Spansion Inc. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as described in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: November 6, 2014	/s/ John H. Kispert
	John H. Kispert
	President and Chief Executive Officer

EX-31

Exhibit 31.2

Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Randy W. Furr, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Spansion Inc. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as described in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: November 6, 2014	/s/ Randy W. Furr
	Randy W. Furr
	Corporate Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. § 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Spansion Inc. (the "Company") hereby certifies, to such officer's knowledge, that:

(i.) the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 28, 2014 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii.) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 6, 2014	/s/ John H. Kispert
	John H. Kispert
	President and Chief Executive Officer

EX-32

Exhibit 32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. § 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Spansion Inc. (the "Company") hereby certifies, to such officer's knowledge, that:

(i.) the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 28, 2014 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii.) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 6, 2014	/s/ Randy W. Furr
	Randy W. Furr
	Corporate Executive Vice President and Chief Financial Officer

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Note 4 - Balance Sheet Components (Details) (USD $)	1 Months Ended	9 Months Ended				3 Months Ended	1 Months Ended
	Jan. 23, 2014 sqft	Sep. 28, 2014	Dec. 29, 2013	Jan. 23, 2014 Land Disposal [Member] acre	Jan. 23, 2014 Buildings Disposed [Member] sqft	Dec. 28, 2014 Sunnyvale Property [Member] Scenario, Forecast [Member]	May 22, 2014 Ridder Park Drive [Member]	Sep. 28, 2014 Accrued Liabilities and Other [Member]	Sep. 28, 2014 Cash Available Inside the USA [Member]	Dec. 29, 2013 Cash Available Inside the USA [Member]	Sep. 28, 2014 Outside The United States Of America [Member]	Dec. 29, 2013 Outside The United States Of America [Member]
Note 4 - Balance Sheet Components (Details) [Line Items]
Cash, Cash Equivalents, and Short-term Investments		$ 326,800,000	$ 311,500,000						$ 309,400,000	$ 298,300,000	$ 17,400,000	$ 13,200,000
Area of Land (in Acres)				24.5
Area of Real Estate Property (in Square Feet)					471,000
Sale Leaseback Transaction, Net Proceeds, Financing Activities	58,900,000	58,908,000
Sale Leaseback Transaction Area Subject To Lease (in Square Feet)	170,000
Rent Free Period	6 months
Sale Leaseback Transaction, Deferred Gain, Net								59,800,000
Gain (Loss) on Sale of Properties						$ 38,100,000
Lessee Leasing Arrangements, Operating Leases, Term of Contract							12 years
Lessee Leasing Arrangements, Operating Leases, Renewal Term							5 years

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Note 8 - Intangible Assets and Goodwill (Details) - Estimated Future Amortization Expense (USD $) In Thousands, unless otherwise specified	Sep. 28, 2014	Dec. 29, 2013
Estimated Future Amortization Expense [Abstract]
Fiscal 2014 (remaining 3 months)	$ 7,929
Fiscal 2015	35,759
Fiscal 2016	35,926
Fiscal 2017	25,061
Fiscal 2018	19,607
Fiscal 2019 and beyond	16,553
Total	$ 140,835	$ 167,949

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Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Stock Option Activities (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 28, 2014	Dec. 29, 2013
Stock Option Activities [Abstract]
Number of Shares	5,007,270	6,542,929
Exercise Price	$ 13.29	$ 13.03
Contractual Life (in Years)	3 years 266 days	4 years 153 days
Intrinsic Value	$ 46,191	$ 14,061
Total vested and exercisable as of September 28, 2014	4,386,657
Total vested and exercisable as of September 28, 2014	$ 13.63
Total vested and exercisable as of September 28, 2014	3 years 200 days
Total vested and exercisable as of September 28, 2014	38,934
Cancelled/Forfeited	(299,269)
Cancelled/Forfeited	$ 15.39
Exercised	(1,236,390)
Exercised	$ 18.06
Exercised	$ 8,130

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Note 11 - Derivative Financial Instruments (Details) - Offsetting of Derivative Assets (Foreign Exchange Contract [Member], USD $) In Thousands, unless otherwise specified	Sep. 28, 2014		Dec. 29, 2013
Foreign Exchange Contract [Member]
Offsetting Assets [Line Items]
Gross amounts of recognized Assets	$ 3,928		$ 3,493
Net Amounts of Assets presented in the Condensed Consolidated Balance Sheets	3,928		3,493
Financial Instruments	(2,709)	[1]	(1,572)	[1]
Net amount	$ 1,219		$ 1,921

[1] Financial Instruments as of September 28, 2014 and December 29, 2013 relates to derivative liabilities and the term loan facility which can be net settled against derivative assets in accordance with the Company's master netting agreements.

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Note 8 - Intangible Assets and Goodwill (Details) - Goodwill (USD $) In Thousands, unless otherwise specified	Sep. 28, 2014	Dec. 29, 2013
Goodwill [Abstract]
Goodwill	$ 166,334	$ 166,422

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Note 16 - Commitments and Contingencies (Details) - Product Warranties (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2014	Sep. 29, 2013	Sep. 28, 2014	Sep. 29, 2013
Product Warranties [Abstract]
Balance at beginning of period	$ 2,513	$ 1,127	$ 2,055	$ 2,124
Provision for warranties issued	519	760	1,890	1,360
Settlements made	(1,076)	(827)	(1,525)	(2,412)
Changes in reserve for pre-existing warranties during the period	280	106	(184)	94
Balance at end of period	$ 2,236	$ 1,166	$ 2,236	$ 1,166

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Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Weighted Average Fair Value of Stock Options Granted (USD $)	3 Months Ended	9 Months Ended
	Sep. 29, 2013	Sep. 29, 2013
Weighted Average Fair Value of Stock Options Granted [Abstract]
Weighted average fair value of stock options granted	$ 3.68	$ 4.69

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Note 11 - Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 28, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

Buy / Sell	September 28, 2014	December 29, 2013
	(in millions)
Japanese Yen / US dollar	¥ 735.7/$6.8	¥ 2,945/$28.2
US dollar / Japanese Yen	$11.7/¥ 1,276	$42.0/¥ 4,047
US dollar / EUR	$33.9/€ 26.5	$23.4/€ 17.1

Derivative Instruments, Gain (Loss) [Table Text Block]

	Three Months Ended					Nine Months Ended
	September 28, 2014		September 29, 2013			September 28, 2014			September 29, 2013
	(in thousands)
Derivatives Designated as Hedging Instruments
Foreign Exchange Forward Contracts
Net unrealized gain (loss) recognized in OCI (1)	$	2,716	$	(391	)	$	(4,174	)	$	13,669
Net loss (gain) reclassified from accumulated OCI into net sales (effective portion)	$	528	$	(3,113	)	$	3,511		$	(7,701	)
Net loss reclassified from accumulated OCI into cost of goods sold	$	2,449	$	-		$	2,449		$	-
Net loss reclassified from accumulated OCI into sales, general and administrative expenses	$	129	$	-		$	129		$	-
Net loss reclassified from accumulated OCI into research and development expenses	$	237	$	-		$	237		$	-
Net gain reclassified from accumulated OCI into income (ineffective portion) (2)	$	-	$	-		$	-		$	(2,415	)
Derivatives Not Designated as Hedging Instruments
Net gain (loss) recognized in income
Swap interest expense (3)	$	-	$	-		$	-		$	(8	)
Foreign Exchange Forward Contracts (2)	$	3,685	$	(1,053	)	$	5,679		$	(813	)
Foreign Exchange Options Contracts (2)	$	-	$	(197	)	$	-		$	-

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

	September 28, 2014				December 29, 2013
Balance sheet location	Derivatives designated as hedging instruments		Derivatives not designated as hedging instruments		Derivatives designated as hedging instruments		Derivatives not designated as hedging instruments
	(in thousands)
Prepaid expenses and other current assets
Foreign Exchange Forward Contracts	$	3,610	$	318	$	-	$	3,493
Accrued liabilities and other
Foreign Exchange Forward Contracts	$	1,983	$	27	$	-	$	313

Offsetting Assets [Table Text Block]

							Gross amounts not offset on the Condensed Consolidated Balance Sheets but have legal rights to offset
	Gross amounts of recognized Assets		Gross amounts offset in the Condensed Consolidated Balance Sheets		Net amounts of Assets presented in the Condensed Consolidated Balance Sheets		Financial Instruments (1)			Cash collateral pledged		Net amount
	(in thousands)
As of September 28, 2014:
Foreign exchange contracts	$	3,928	$	-	$	3,928	$	(2,709	)	$	-	$	1,219
As of December 29, 2013:
Foreign exchange contracts	$	3,493	$	-	$	3,493	$	(1,572	)	$	-	$	1,921

Offsetting Liabilities [Table Text Block]

							Gross amounts not offset on the Condensed Consolidated Balance Sheets but have legal rights to offset
	Gross amounts of recognized Liabilities		Gross amounts offset in the Condensed Consolidated Balance Sheets		Net amounts of Liabilities presented in the Condensed Consolidated Balance Sheets		Financial Instruments				Cash collateral pledged		Net amount
	(in thousands)
As of September 28, 2014:
Foreign exchange contracts	$	2,010	$	-	$	2,010	$	(1,601	)	(1)	$	-	$	409
As of December 29, 2013:
Foreign exchange contracts	$	313	$	-	$	313	$	(226	)	(2)	$	-	$	87

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Note 17 - Closure of Chapter 11 Cases (Details) (USD $)	9 Months Ended
	Sep. 28, 2014	Apr. 16, 2010
Reorganizations [Abstract]
Bankruptcy Claims Disputed		$ 1,500,000,000
Gain (Loss) on Bankruptcy Related Reserve on Final Settlement	$ 3,205,000
Stock Issued During Period, Shares, Reserved for Claims (in Shares)	46,264,760

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Note 13 - Income Taxes (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 28, 2014	Sep. 29, 2013	Sep. 28, 2014	Sep. 29, 2013	Dec. 29, 2013
Note 13 - Income Taxes (Details) [Line Items]
Income Tax Expense (Benefit)	$ 2,441,000	$ (1,644,000)	$ 8,703,000	$ (891,000)
Federal Operating Loss Carryforward Amount Subject To Annual Limitations					489,700,000
Annual Limitation On Federal Operating Loss Carryforward					27,200,000
Internal Revenue Service (IRS) [Member]
Note 13 - Income Taxes (Details) [Line Items]
Operating Loss Carryforwards					1,016,000,000
Tax Credit Carryforward, Amount					3,500,000
State and Local Jurisdiction [Member] | CALIFORNIA
Note 13 - Income Taxes (Details) [Line Items]
Tax Credit Carryforward, Amount					17,500,000
State and Local Jurisdiction [Member]
Note 13 - Income Taxes (Details) [Line Items]
Operating Loss Carryforwards					219,800,000
Tax Credit Carryforward, Amount					$ 18,200,000

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Note 9 - Financing Arrangements (Details) - Debt (USD $) In Thousands, unless otherwise specified	Sep. 28, 2014	Dec. 29, 2013	Sep. 29, 2013
Note 9 - Financing Arrangements (Details) - Debt [Line Items]
Term Loan	$ 294,334	$ 296,135
Total debt	409,569	501,932
Less: current portion	22,285	97,320
Long-term debt	387,284	404,612
Senior Convertible Notes [Member]
Note 9 - Financing Arrangements (Details) - Debt [Line Items]
Senior notes	115,235	111,733	110,609
Senior Unsecured Notes [Member]
Note 9 - Financing Arrangements (Details) - Debt [Line Items]
Senior notes		$ 94,064

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Note 15 - Capital Structure (Details)	1 Months Ended
	Jan. 22, 2014
Common Class B [Member]
Note 15 - Capital Structure (Details) [Line Items]
Conversion of Stock, Shares Converted	1
Common Class A [Member]
Note 15 - Capital Structure (Details) [Line Items]
Conversion of Stock, Shares Issued	1
Maximum [Member] | SLS Spansion Holdings LLC [Member]
Note 15 - Capital Structure (Details) [Line Items]
Voting Interests, Ownership Percentage	5.00%

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Note 16 - Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 28, 2014
Commitments and Contingencies Disclosure [Abstract]
Recorded Unconditional Purchase Obligation	$ 122.6
Product Warranty Term	1 year

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Note 11 - Derivative Financial Instruments (Details) - Offsetting of Derivative Liabilities (Foreign Exchange Contract [Member], USD $) In Thousands, unless otherwise specified	Sep. 28, 2014		Dec. 29, 2013
Foreign Exchange Contract [Member]
Offsetting Liabilities [Line Items]
Gross Amounts of Recognized Liabilities	$ 2,010		$ 313
Net Amounts of Liabilities presented in the Condensed Consolidated Balance Sheets	2,010		313
Financial Instruments	(1,601)	[1]	(226)	[2]
Net Amount	$ 409		$ 87

[1] Financial Instruments as of September 28, 2014 relates to cash and cash equivalents, short-term investments and derivative assets which can be net settled against derivative liabilities in accordance with the Company's master netting agreements.

[2] Financial Instruments as of December 29, 2013 relates to derivative assets which can be net settled against derivative liabilities in accordance with the Company's master netting agreements.

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Note 3 - Acquisition (Tables)

9 Months Ended

Sep. 28, 2014

Business Combinations [Abstract]

Business Acquisition, Pro Forma Information [Table Text Block]

	Three Months Ended			Nine Months Ended
	September 29, 2013			September 29, 2013
	(in thousands, except per share amounts)
Net sales		314,701			947,551
Net loss		(24,106	)		(159,988	)
Net loss
Basic		(0.41	)		(2.73	)
Diluted		(0.41	)		(2.73	)

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Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Key Executive RSUs and PSU Award Activities (USD $)	9 Months Ended
	Sep. 28, 2014		Dec. 28, 2013
Key Executive Rsu [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Key Executive RSUs and PSU Award Activities [Line Items]
Number of Shares			974,286
Weighted Average Grant-date Fair Value			$ 12.40
Cancelled/Forfeited	(357,870)
Cancelled/Forfeited	$ 11.03
Vested	(318,781)
Vested	$ 11.37
Number of Shares	297,635		974,286
Weighted Average Grant-date Fair Value	$ 15.15		$ 12.40
Performance Stock Units [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Key Executive RSUs and PSU Award Activities [Line Items]
Number of Shares			362,000
Weighted Average Grant-date Fair Value			$ 7.38
Granted	274,000	[1]
Granted	$ 17.94
Cancelled/Forfeited	(18,000)
Cancelled/Forfeited	$ 7.40
Vested	(172,000)
Vested	$ 7.40
Number of Shares	446,000		362,000
Weighted Average Grant-date Fair Value	$ 13.86		$ 7.38

[1] Includes performance awards granted in fiscal 2014 at target. Additional awards that could be earned under the fiscal 2014 grant total 137,000.

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Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) (USD $)	3 Months Ended	9 Months Ended						0 Months Ended
	Sep. 28, 2014	Sep. 28, 2014	Sep. 28, 2014 Performance Stock Units [Member] Net of Forfeitures and Cancellations [Member]	Sep. 28, 2014 Performance Stock Units [Member] Minimum [Member]	Sep. 28, 2014 Performance Stock Units [Member] Maximum [Member]	Sep. 28, 2014 Performance Stock Units [Member] Senior Executives [Member]	Sep. 28, 2014 Performance Stock Units [Member]	May 16, 2014 The 2014 Employee Stock Purchase Plan [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement for Performance Awards Vesting Period							3 years
Minimum Performance Based Shares For 2014 Grants That Can Vest				0.00%		0.00%
Maximum Performance Based Shares For 2014 Grants That Can Vest					150.00%	100.00%
Share-based Compensation Arrangement for Performance Awards Based on TSR						18 months
Share-based Compensation Arrangement by Share-based Payment Award, Employee Stock Purchase Plan,Maximum Annual Contributions Per Employee, Percent								10.00%
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date								85.00%
Maximum Shares Issuable Under the Employee Stock Purchase Plan (in Shares)								2,000,000
Additional Awards That Could Be Earned Under the 2014 PSUs (in Shares)			137,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars)	$ 31,700,000	$ 31,700,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)	0	0
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense (in Dollars)	$ 0	$ 0

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Note 14 - Restructuring and Others (Details) - Restructuring Activity Related to 2013 Restructuring Plan (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended
	Sep. 29, 2013	Sep. 29, 2013	Sep. 28, 2014 Fiscal Year 2013 Restructuring Plan [Member]	Sep. 28, 2014 Fiscal Year 2013 Restructuring Plan [Member]
Note 14 - Restructuring and Others (Details) - Restructuring Activity Related to 2013 Restructuring Plan [Line Items]
Accrued restructuring balance, beginning of period			$ 39	$ 844
Provision:
Severance and others		6,264
Restructuring charges	6,264	6,264
Non-cash adjustments		(230)	(15)	(46)
Cash payments		(4,351)		(774)
Accrued restructuring balance, end of period	$ 1,683	$ 1,683	$ 24	$ 24

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Note 3 - Acquisition (Details) (USD $)	9 Months Ended	1 Months Ended	2 Months Ended
	Sep. 29, 2013	Aug. 01, 2013 Fujitsu Semiconductor Limited [Member]	Sep. 29, 2013 Fujitsu Semiconductor Limited [Member]
Note 3 - Acquisition (Details) [Line Items]
Business Combination, Consideration Transferred		$ 158,500,000
Payments to Acquire Businesses, Net of Cash Acquired	148,144,000	150,000,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual			$ 92,900,000

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Note 8 - Intangible Assets and Goodwill (Details) - Intangible Assets (USD $) In Thousands, unless otherwise specified				9 Months Ended					9 Months Ended					9 Months Ended					9 Months Ended
	Sep. 28, 2014		Dec. 29, 2013	Sep. 28, 2014 Developed Technology [Member] Minimum [Member]	Sep. 28, 2014 Developed Technology [Member] Maximum [Member]	Sep. 28, 2014 Developed Technology [Member]		Dec. 29, 2013 Developed Technology [Member]	Sep. 28, 2014 Customer Relationships [Member] Minimum [Member]	Sep. 28, 2014 Customer Relationships [Member] Maximum [Member]	Sep. 28, 2014 Customer Relationships [Member]		Dec. 29, 2013 Customer Relationships [Member]	Sep. 28, 2014 Trade Names [Member] Minimum [Member]	Sep. 28, 2014 Trade Names [Member] Maximum [Member]	Sep. 28, 2014 Trade Names [Member]		Dec. 29, 2013 Trade Names [Member]	Sep. 28, 2014 Trademarks [Member] Minimum [Member]	Sep. 28, 2014 Trademarks [Member] Maximum [Member]	Sep. 28, 2014 Trademarks [Member]		Dec. 29, 2013 Trademarks [Member]	Sep. 28, 2014 In Process Research and Development [Member]		Dec. 29, 2013 In Process Research and Development [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated range of lives (in years)				5 years	10 years				5 years	10 years				6 months	7 years				7 years	8 years
Gross Amount	$ 261,794	[1]	$ 263,273			$ 140,976	[1]	$ 140,476			$ 110,039	[1]	$ 110,119			$ 8,079	[1]	$ 9,478			$ 2,700	[1]	$ 2,700		[1],[2]	$ 500	[2]
Accumulated Amortization	(120,959)		(95,324)			(69,333)		(53,661)			(45,945)		(35,976)			(5,287)		(5,545)			(394)		(142)		[2]		[2]
Net Amount	$ 140,835		$ 167,949			$ 71,643		$ 86,815			$ 64,094		$ 74,143			$ 2,792		$ 3,933			$ 2,306		$ 2,558		[2]	$ 500

[1] The changes in gross balance of intangible assets resulted from the removal of fully amortized assets no longer in use and from foreign currency translation adjustments.

[2] All of the IP R&D reached technological feasibility during the nine months ended September 28, 2014 and was reclassified into developed technology.

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Note 11 - Derivative Financial Instruments (Details) - Notional Amounts of Outstanding Contracts (Not Designated as Hedging Instrument [Member]) In Millions, unless otherwise specified	Sep. 28, 2014 Buy JPY [Member] USD ($)	Sep. 28, 2014 Buy JPY [Member] JPY (¥)	Dec. 29, 2013 Buy JPY [Member] USD ($)	Dec. 29, 2013 Buy JPY [Member] JPY (¥)	Sep. 28, 2014 Sell JPY [Member] USD ($)	Sep. 28, 2014 Sell JPY [Member] JPY (¥)	Dec. 29, 2013 Sell JPY [Member] USD ($)	Dec. 29, 2013 Sell JPY [Member] JPY (¥)	Sep. 28, 2014 Sell EUR [Member] USD ($)	Sep. 28, 2014 Sell EUR [Member] EUR (€)	Dec. 29, 2013 Sell EUR [Member] USD ($)	Dec. 29, 2013 Sell EUR [Member] EUR (€)
Note 11 - Derivative Financial Instruments (Details) - Notional Amounts of Outstanding Contracts [Line Items]
Japanese Yen / US dollar	$ 6.8	¥ 735.7	$ 28.2	¥ 2,945.0	$ 11.7	¥ 1,276.0	$ 42.0	¥ 4,047.0	$ 33.9	€ 26.5	$ 23.4	€ 17.1
US dollar / Japanese Yen	6.8	735.7	28.2	2,945.0	11.7	1,276.0	42.0	4,047.0	33.9	26.5	23.4	17.1
US dollar / EUR	$ 6.8	¥ 735.7	$ 28.2	¥ 2,945.0	$ 11.7	¥ 1,276.0	$ 42.0	¥ 4,047.0	$ 33.9	€ 26.5	$ 23.4	€ 17.1

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Note 9 - Financing Arrangements (Details) - Interest Expense Recognized on the Notes (Parentheticals) (Senior Convertible Notes [Member])	Sep. 28, 2014	Dec. 29, 2013	Sep. 29, 2013
Senior Convertible Notes [Member]
Note 9 - Financing Arrangements (Details) - Interest Expense Recognized on the Notes (Parentheticals) [Line Items]
Contractual interest expense, rate per annum	2.00%	2.00%	2.00%

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Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Fair Value Assumptions Used to Value PSU Awards Granted (Performance Stock Units [Member], USD $)	9 Months Ended
	Sep. 28, 2014	Sep. 29, 2013
Performance Stock Units [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Fair Value Assumptions Used to Value PSU Awards Granted [Line Items]
Stock price on grant date (in Dollars per share)	$ 16.58	$ 11.50
Expected volatility	42.79%	50.90%
Risk-free interest rate	0.73%	0.21%
Dividend yield	0.00%	0.00%

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Note 3 - Acquisition

9 Months Ended

Sep. 28, 2014

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

3. Acquisition         

On August 1, 2013, the Company acquired the microcontroller and analog business (the MCA business) of Fujitsu Semiconductor Limited (FSL) for purchase consideration of $158.5 million, ($150.0 million, net of cash acquired). Pursuant to the terms and conditions of a Stock Purchase Agreement with FSL, the Company acquired certain subsidiaries and assets and assumed certain liabilities of FSL for purposes of acquiring FSL’s business of designing, developing, marketing and selling microcontroller and analog semiconductor products. 

There were no changes in fiscal 2014 to the allocation of purchase price to the net assets acquired under the MCA business.

Pro Forma consolidated results of operations for fiscal 2013

The following unaudited pro forma consolidated results of operations for the three months and nine months ended September 29, 2013 assumes the acquisition had occurred as of December 26, 2011. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisition had taken place on December 26, 2011 or of results that may occur in future. For the purpose of this pro forma financial information, adjustments were made to include the depreciation of the acquired property and equipment, the amortization of the acquired intangible assets and the income tax effects relating to such adjustments. Adjustments were also made to exclude the gain on acquisition, acquisition related costs, amortization of the fair market value of inventory markup and the income tax effects relating to such adjustments for the three and nine months ended September 29, 2013.

	Three Months Ended			Nine Months Ended
	September 29, 2013			September 29, 2013
	(in thousands, except per share amounts)
Net sales		314,701			947,551
Net loss		(24,106	)		(159,988	)
Net loss
Basic		(0.41	)		(2.73	)
Diluted		(0.41	)		(2.73	)

The MCA business contributed net sales of $92.9 million from acquisition date of August 1, 2013 through September 29, 2013. It is impracticable to determine the earnings for the MCA business as the Company does not allocate non-operating items to its various product groups.

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Note 10 - Fair Value Measurement (Details) (USD $) In Millions, unless otherwise specified	Sep. 28, 2014	Dec. 29, 2013
Note 10 - Fair Value Measurement (Details) [Line Items]
Cash, Cash Equivalents, and Short-term Investments	$ 326.8	$ 311.5
Held in Operating Accounts [Member]
Note 10 - Fair Value Measurement (Details) [Line Items]
Cash, Cash Equivalents, and Short-term Investments	280.4	282.2
Money Market Funds [Member]
Note 10 - Fair Value Measurement (Details) [Line Items]
Cash, Cash Equivalents, and Short-term Investments	1.0	3.9
Certificates of Deposit [Member]
Note 10 - Fair Value Measurement (Details) [Line Items]
Cash, Cash Equivalents, and Short-term Investments	24.3	11.4
Bank Time Deposits [Member]
Note 10 - Fair Value Measurement (Details) [Line Items]
Cash, Cash Equivalents, and Short-term Investments	$ 21.1	$ 14.0

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Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Shares Available for Grant	9 Months Ended
	Sep. 28, 2014
Restricted Stock Units (RSUs) [Member] | Two Thousand Ten Equity Incentive Award Plan [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Shares Available for Grant [Line Items]
Awards other than options granted, net of forfeitures/cancellations	(1,211,595)
Restricted Stock Units (RSUs) [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Shares Available for Grant [Line Items]
Awards other than options granted, net of forfeitures/cancellations	(1,320,531)
Key Executive Rsu [Member] | Two Thousand Ten Equity Incentive Award Plan [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Shares Available for Grant [Line Items]
Awards other than options granted, net of forfeitures/cancellations	357,870
Performance Stock Units [Member] | Two Thousand Ten Equity Incentive Award Plan [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Shares Available for Grant [Line Items]
Awards other than options granted, net of forfeitures/cancellations	(256,000)	[1]
Performance Stock Units [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Shares Available for Grant [Line Items]
Awards other than options granted, net of forfeitures/cancellations	(274,000)	[1]
Two Thousand Ten Equity Incentive Award Plan [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Shares Available for Grant [Line Items]
Balance as of December 29, 2013	2,350,404
Additional shares issuable under 2010 plan (annual increase for 2014)	2,069,902
Stock options forfeited/cancelled through September 28, 2014	299,269
Balance as of September 28, 2014	3,609,850

[1] Includes performance awards granted in fiscal 2014 at target. Additional awards that could be earned under the fiscal 2014 grant total 137,000.

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Note 7 - Net Income (Loss) Per Share (Tables)

9 Months Ended

Sep. 28, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended						Nine Months Ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013
	(in thousands except for per-share amounts)
Numerator:
Net loss	$	(10,846	)	$	(36,904	)	$	(45,315	)	$	(54,570	)
Denominator:
Denominator for basic / diluted net loss per share, weighted average shares		61,543			58,785			60,705			58,506
Net loss per share:
Basic / Diluted net loss per share	$	(0.18	)	$	(0.63	)	$	(0.75	)	$	(0.93	)
Potentially dilutive shares excluded from the diluted net loss per share computation because their effect would have been anti-dilutive RSUs, PSUs, options and the employee stock purchase plan		7,846			4,441			7,174			4,555
Conversion of Senior Exchangeable Notes		10,814			3,996			10,814			1,352
Total antidilutive shares		18,660			8,437			17,988			5,907

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Note 6 - Equity Incentive Plan and Stock-Based Compensation (Tables)

9 Months Ended

Sep. 28, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule Of Shares Available For Grant [Table Text Block]

	Shares Available For Grant
Balance as of December 29, 2013		2,350,404
Additional shares issuable under 2010 plan (annual increase for 2014)		2,069,902
Stock options forfeited/cancelled through September 28, 2014		299,269
RSUs granted, net of forfeitures/cancellations		(1,211,595	)
Key Executive RSUs forfeited/cancelled through September 28, 2014		357,870
PSUs granted, net of forfeitures/cancellations (1)		(256,000	)
Balance as of September 28, 2014		3,609,850

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three Months Ended				Nine Months Ended
	September 28, 2014		September 29, 2013		September 28, 2014		September 29, 2013
	(in thousands)
Cost of sales	$	1,553	$	1,384	$	4,476	$	4,235
Research and development		2,484		1,952		6,298		7,420
Sales, general and administrative		5,439		3,692		14,304		11,669
Stock-based compensation expense after income taxes(1)	$	9,476	$	7,028	$	25,078	$	23,324

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Three Months Ended			Nine Months Ended
	September 29, 2013			September 29, 2013
Expected volatility		41.84	%		47.06	%
Risk-free interest rate		1.14	%		0.94	%
Expected term (in years)		4.35			4.35
Dividend yield		0.00	%		0.00	%

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value [Table Text Block]

	Three Months Ended		Nine Months Ended
	September 29, 2013		September 29, 2013
Weighted average fair value of stock options granted	$	3.68	$	4.69

Fair Value Assumptions Used To Value PSU Awards Granted [Table Text Block]

	Nine Months Ended
	September 28, 2014			September 29, 2013
Stock price on grant date	$	16.58		$	11.50
Expected volatility		42.79	%		50.90	%
Risk-free interest rate		0.73	%		0.21	%
Dividend yield		0.00	%		0.00	%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Life (in Years)		Value
								(in thousands)
Outstanding stock options as of December 29, 2013		6,542,929		$	13.03		4.42	$	14,061
Granted		-		$	-
Cancelled/Forfeited		(299,269	)	$	15.39
Exercised		(1,236,390	)	$	18.06			$	8,130
Outstanding stock options as of September 28, 2014		5,007,270		$	13.29		3.73	$	46,191
Total vested and exercisable as of September 28, 2014		4,386,657		$	13.63		3.55	$	38,934

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

	RSU
				Weighted Average
	Number of			Grant-date
	Shares			Fair Value
Outstanding as of December 29, 2013		2,384,712		$	14.01
Granted		1,320,531		$	16.13
Cancelled/Forfeited		(108,936	)	$	13.09
Vested		(1,337,996	)	$	12.83
Outstanding as of September 28, 2014		2,258,311		$	15.99

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

	Key Executive RSU					PSU
				Weighted Average					Weighted Average
	Number of			Grant-date		Number of			Grant-date
	Shares			Fair Value		Shares			Fair Value
Outstanding as of December 29, 2013		974,286		$	12.40		362,000		$	7.38
Granted		-		$	-		274,000	(1)	$	17.94
Cancelled/Forfeited		(357,870	)	$	11.03		(18,000	)	$	7.40
Vested		(318,781	)	$	11.37		(172,000	)	$	7.40
Outstanding as of September 28, 2014		297,635		$	15.15		446,000		$	13.86

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Note 9 - Financing Arrangements (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	9 Months Ended
	Jan. 21, 2014	Sep. 28, 2014
Note 9 - Financing Arrangements (Details) [Line Items]
Derivative, Price Risk Option Strike Price (in Dollars per Item)		13.87
Derivative, Cap Price (in Dollars per Item)		18.14
Debt Instrument, Repurchase Amount	$ 94.1
Debt Instrument, Redemption Price, Percentage	103.938%
Repayments of Senior Debt	99.1
Gain (Loss) on Repurchase of Debt Instrument	$ (4.8)
Debt Instrument, Covenant Compliance		As of September 28, 2014, the Company was in compliance with all of the 2012 Revolving Credit Facility’s covenants.
2012 Revolving Credit Facility [Member]
Note 9 - Financing Arrangements (Details) [Line Items]
Line of Credit Facility, Covenant Terms, Leverage Ratio		2.75

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Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Total Recorded Stock-based Compensation Expense (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 28, 2014		Sep. 29, 2013		Sep. 28, 2014		Sep. 29, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense after income taxes(1)	$ 9,476	[1]	$ 7,028	[1]	$ 25,078	[1]	$ 23,324	[1]
Cost of Sales [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock based compensation expense	1,553		1,384		4,476		4,235
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock based compensation expense	2,484		1,952		6,298		7,420
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock based compensation expense	$ 5,439		$ 3,692		$ 14,304		$ 11,669

[1] There was no income tax benefit related to stock-based compensation because all of the Company's U.S. deferred tax assets, net of U.S. deferred tax liabilities, continue to be subject to a full valuation allowance.

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Note 8 - Intangible Assets and Goodwill (Tables)

9 Months Ended

Sep. 28, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

			September 28, 2014							December 29, 2013
	Estimated range of lives (in years)		Gross Amount (2)		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
			(in thousands)
Developed technology		5 to 10	$	140,976	$	(69,333	)	$	71,643	$	140,476	$	(53,661	)	$	86,815
Customer relationships		5 to 10		110,039		(45,945	)		64,094		110,119		(35,976	)		74,143
Trade names		0.5 to 7		8,079		(5,287	)		2,792		9,478		(5,545	)		3,933
Trademarks		7 to 8		2,700		(394	)		2,306		2,700		(142	)		2,558
IP R&D (1)				-		-			-		500		-			500
Total Intangible Assets			$	261,794	$	(120,959	)	$	140,835	$	263,273	$	(95,324	)	$	167,949

Schedule of Actual Amortization Expense [Table Text Block]

	Three Months Ended				Nine Months Ended
	September 28, 2014		September 29, 2013		September 28, 2014		September 29, 2013
	(in thousands)
Amortization expense	$	8,940	$	9,514	$	27,034	$	23,140

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

	Estimated Future Amortization
	(in thousands)
Fiscal 2014 (remaining 3 months)	$	7,929
Fiscal 2015		35,759
Fiscal 2016		35,926
Fiscal 2017		25,061
Fiscal 2018		19,607
Fiscal 2019 and beyond		16,553
Total	$	140,835

Schedule of Goodwill [Table Text Block]

	September 28, 2014		December 29, 2013
	(in thousands)
Goodwill	$	166,334	$	166,422

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Note 9 - Financing Arrangements (Tables)

9 Months Ended

Sep. 28, 2014

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

	September 28, 2014		December 29, 2013
	(in thousands)
Debt obligations:
Term Loan	$	294,334	$	296,135
2.00% Senior Exchangeable Notes		115,235		111,733
7.875% Senior Notes		-		94,064
Total debt	$	409,569	$	501,932
Less: current portion		22,285		97,320
Long-term debt	$	387,284	$	404,612

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

	September 28, 2014			September 29, 2013
	(in thousands)
Principal amount	$	150,000		$	150,000
Unamortized debt discount		(34,765	)		(39,391	)
Net carrying value	$	115,235		$	110,609

Interest Income and Interest Expense Disclosure [Table Text Block]

	Three Months Ended		Nine Months Ended		Three and Nine Months Ended
	September 28, 2014		September 28, 2014		September 29, 2013
	(in thousands)
Contractual interest expense at 2% per annum	$	746	$	2,230	$	290
Amortization of debt issuance costs		130		391		50
Accretion of debt discount		1,185		3,502		432
Total	$	2,061	$	6,123	$	772

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Note 2 - Recent Accounting Pronouncements

9 Months Ended

Sep. 28, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

2. Recent Accounting Pronouncements

In May 2014, the FASB issued an accounting standard update that provides for a new single revenue accounting model that will replace existing revenue recognition guidance. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which a Company expects to be entitled in exchange for those goods or services. The guidance becomes effective in the first quarter of the Company’s fiscal year ending December 31, 2017. The Company will have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard update. The Company is evaluating the impact that the standard update will have on its consolidated financial statements.

In August 2014, the FASB issued an accounting standard update relating to management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and on the related disclosures. The update requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. The guidance is effective in the interim and annual periods beginning after December 15, 2016, with early application permitted.  The adoption of this update is not expected to have a material effect on the Company’s consolidated financial statements or disclosures.

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Note 10 - Fair Value Measurement (Tables)

9 Months Ended

Sep. 28, 2014

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	September 28, 2014							December 29, 2013
	Level 1		Level 2		Total			Level 1		Level 2		Total
	(in thousands)
Money market funds	$	1,010	$	-	$	1,010	(1)	$	3,906	$	-	$	3,906	(2)
Foreign Exchange Forward Contracts		-		3,928		3,928			-		3,493		3,493
Total financial assets	$	1,010	$	3,928	$	4,938		$	3,906	$	3,493		7,399
Foreign Exchange Forward Contracts			$	2,010	$	2,010		$	-	$	313	$	313
Total financial liabilities	$	-	$	2,010	$	2,010		$	-	$	313	$	313

Schedule Of Financial Instruments Not Carried At Fair Value [Table Text Block]

	September 28, 2014				December 29, 2013
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
	(in thousands)
Debt traded in the market:
Term Loan	$	294,334	$	290,287	$	296,135	$	295,170
2.0% Senior Exchangeable Notes		115,235		199,356		111,733		129,104
7.875% Senior Notes		-		-		94,064		97,591
Total Debt Obligations	$	409,569	$	489,643	$	501,932	$	521,865

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Note 4 - Balance Sheet Components (Details) - Balance Sheet Components (USD $) In Thousands, unless otherwise specified	Sep. 28, 2014	Dec. 29, 2013	Sep. 29, 2013	Dec. 30, 2012
Cash and cash equivalents
Cash	$ 280,421	$ 282,163
Cash equivalents:
Money market funds	1,010	3,906
Cash and cash equivalents	281,991	286,069	193,025	262,177
Short-term investments
Time deposits	21,072	14,045
Short-term investments	44,778	25,428
Account receivable, net
Accounts receivable, gross	165,320	178,252
Allowance for doubtful accounts	(387)	(414)
Account receivable, net	164,933	177,838
Inventories
Raw materials	9,892	11,056
Work-in-process	211,462	176,601
Finished goods	47,913	66,497
Inventories	269,267	254,154
Property, plant and equipment, net
Land	45,168	45,168
Buildings and leasehold improvements	68,855	61,923
Equipment	422,385	385,679
Construction in progress	19,632	19,734
Accumulated depreciation and amortization	(366,774)	(326,999)
Property, plant and equipment, net	189,266	185,505
Accrued compensation and benefits
Accrued vacation	12,050	11,077
MCA business employees pension related obligation	6,329	22,406
Others	26,062	24,393
Accrued compensation and benefits	44,441	57,876
Accrued liabilities and other
Short term license liability	6,064	13,003
Obligation recorded from sale of Sunnyvale property	59,782
Litigation reserve	23,570	20,419
Others	59,632	52,930
Accrued liabilities and other	149,048	86,352
Other long term liabilities
MCA business employees pension related obligation	16,978
Others	33,407	32,048
Other long term liabilities	50,385	32,048
Cash and Cash Equivalents [Member]
Cash equivalents:
FDIC insured certificates of deposit	560
Short-term Investments [Member]
Cash equivalents:
FDIC insured certificates of deposit	$ 23,706	$ 11,383

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Note 8 - Intangible Assets and Goodwill (Details) - Actual Amortization Expense (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2014	Sep. 29, 2013	Sep. 28, 2014	Sep. 29, 2013
Actual Amortization Expense [Abstract]
Amortization expense	$ 8,940	$ 9,514	$ 27,034	$ 23,140

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Note 12 - Employees Related Pension Obligation (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended					3 Months Ended			3 Months Ended	9 Months Ended
	Sep. 28, 2014 Spansion Corporate Defined Contribution Pension Plan [Member]	Sep. 28, 2014 Spansion Corporate Defined Contribution Pension Plan [Member]	Sep. 28, 2014 Maximum [Member] Spansion Corporate Defined Contribution Pension Plan [Member]	Sep. 28, 2014 Fujitsu Defined Benefit Corporate Pension [Member] Restricted Cash [Member]	Sep. 28, 2014 Fujitsu Defined Benefit Corporate Pension [Member] Accrued Compensation And Benefits [Member]	Sep. 28, 2014 Fujitsu Defined Benefit Corporate Pension [Member] Other Noncurrent Liabilities [Member]	Jun. 29, 2014 Fujitsu Defined Benefit Corporate Pension [Member]	Mar. 30, 2014 Fujitsu Defined Benefit Corporate Pension [Member]	Sep. 28, 2014 Spansion Corporate Defined Contribution Pension Plan [Member]	Sep. 28, 2014 Spansion Innovates Group Cash Balance Plan [Member]	Sep. 28, 2014 Spansion Innovates Group Cash Balance Plan [Member]
Note 12 - Employees Related Pension Obligation (Details) [Line Items]
Pension Expense								$ 1.5
Gain on Transfer of Fujitsu Defined Pension Plan to Spansion Management Pension Plan							2.5
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Restricted Cash				21.5
Defined Benefit Pension Plan Liabilities, Current					6.1					0.6	0.6
Defined Benefit Pension Plan, Liabilities, Noncurrent						16.3
Percentage Change in Actuarial Assumptions and Plan Provisions Amortized			10.00%
Defined Benefit Plan, Service Cost										0.3	0.3
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year											1.0
Defined Contribution Plan, Cost Recognized	0.6	1.2
Defined Contribution Plan Related Unpaid Liability for the Current Period									$ 0.2

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2014	Sep. 29, 2013	Sep. 28, 2014	Sep. 29, 2013
Net sales	$ 315,930	$ 273,378	$ 942,346	$ 658,020
Cost of sales	215,102	217,209	658,864	498,640
Gross profit	100,828	56,169	283,482	159,380
Research and development	43,241	38,341	126,505	84,666
Sales, general and administrative	60,457	54,544	177,169	117,441
Restructuring charges		6,264		6,264
Operating loss	(2,870)	(42,980)	(20,192)	(48,991)
Interest income and other, net	453	3,578	1,794	7,658
Interest expense	(5,988)	(7,351)	(18,214)	(22,333)
Gain on acquisition of Microcontroller and Analog business		8,205		8,205
Loss before income taxes	(8,405)	(38,548)	(36,612)	(55,461)
Provision (benefit) for income taxes	2,441	(1,644)	8,703	(891)
Net loss	$ (10,846)	$ (36,904)	$ (45,315)	$ (54,570)
Basic (in Dollars per share)	$ (0.18)	$ (0.63)	$ (0.75)	$ (0.93)
Diluted (in Dollars per share)	$ (0.18)	$ (0.63)	$ (0.75)	$ (0.93)
Basic (in Shares)	61,543	58,785	60,705	58,506
Diluted (in Shares)	61,543	58,785	60,705	58,506

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Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Fair Value of Each Stock Option was Estimated at the Date of Grant using a Black-Scholes option (Employee Stock Option [Member])	3 Months Ended	9 Months Ended
	Sep. 29, 2013	Sep. 29, 2013
Employee Stock Option [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - Fair Value of Each Stock Option was Estimated at the Date of Grant using a Black-Scholes option [Line Items]
Expected volatility	41.84%	47.06%
Risk-free interest rate	1.14%	0.94%
Expected term (in years)	4 years 127 days	4 years 127 days
Dividend yield	0.00%	0.00%

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2014	Sep. 29, 2013
Cash Flows from Operating Activities:
Net loss	$ (45,315)	$ (54,570)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	80,540	65,053
Gain on liquidation of auction rate securities		(1,200)
Gain on recovery of impaired investments	(1,629)	(9,592)
Benefit for deferred income taxes	(3,394)	(3,728)
Gain on pension assets	(2,494)
Net gain on sale and disposal of property, plant and equipment	(46)	(3,084)
Gain on acquisition of Microcontroller and Analog business		(8,205)
Costs relating to partial repurchase of 7.875% Senior Notes	1,137	2,280
Compensation recognized under employee stock plans	25,078	23,324
Reserve reversal on final settlement of bankruptcy claims	(3,205)
Changes in assets and liabilities	30,955	60,265
Net cash provided by operating activities	81,627	70,543
Cash Flows from Investing Activities:
Proceeds from liquidation of auction rate securities		1,530
Proceeds from recovery of impaired investments	1,629	9,592
Proceeds from sale of property, plant and equipment	136	3,206
Purchases of property, plant and equipment	(34,857)	(42,760)
Proceeds from sales and maturities of marketable securities	18,463	116,888
Purchases of marketable securities	(37,813)	(100,535)
Acquisition of Microcontroller and Analog business, net of cash acquired		(148,144)
Net cash used for investing activities	(52,442)	(160,223)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock due to options exercised	14,198	2,303
Refinancing cost on Term Loan and Revolver		(282)
Payments on financing arrangements	(105,651)	(4,333)
Proceeds from issuance of 2.00% Senior Exchangeable Notes		150,000
Costs relating to issuance of 2.00% Senior Exchangeable Notes		(4,506)
Purchase of capped call for the 2.00% Senior Exchangeable Notes		(15,375)
Partial repurchase of 7.875% Senior Notes including costs		(106,779)
Net proceeds from sale of Sunnyvale property	58,908
Cash settlement on hedging activities		(268)
Net cash provided by (used for) financing activities	(32,545)	20,760
Effect of exchange rate changes on cash and cash equivalents	(718)	(232)
Net decrease in cash and cash equivalents	(4,078)	(69,152)
Cash and cash equivalents, beginning of period	286,069	262,177
Cash and cash equivalents, end of period	281,991	193,025
Non-cash investing and financing activities:
Liabilities recorded for purchases of property, plant and equipment	21,064	10,448
Unpaid issuance costs relating to the 2.00% Senior Exchangeable Notes		460
Restricted cash relating to employee compensation and benefits received from FSL		$ 32,086

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Note 9 - Financing Arrangements (Details) - Net Carrying Amount of the Liability Component of the Notes (Senior Convertible Notes [Member], USD $) In Thousands, unless otherwise specified	Sep. 28, 2014	Dec. 29, 2013	Sep. 29, 2013
Senior Convertible Notes [Member]
Note 9 - Financing Arrangements (Details) - Net Carrying Amount of the Liability Component of the Notes [Line Items]
Principal amount	$ 150,000		$ 150,000
Unamortized debt discount	(34,765)		(39,391)
Net carrying value	$ 115,235	$ 111,733	$ 110,609

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Note 14 - Restructuring and Others (Tables) (Fiscal Year 2013 Restructuring Plan [Member])

9 Months Ended

Sep. 28, 2014

Fiscal Year 2013 Restructuring Plan [Member]

Note 14 - Restructuring and Others (Tables) [Line Items]

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

	Three Months Ended			Nine Months Ended			Three and Nine Months Ended
	September 28, 2014			September 28, 2014			September 29, 2013
Accrued restructuring balance, beginning of period	$	39		$	844		$	-
Provision:
Severance and others		-			-			6,264
Restructuring charges		-			-			6,264
Non-cash adjustments		(15	)		(46	)		(230	)
Cash payments		-			(774	)		(4,351	)
Accrued restructuring balance, end of period	$	24		$	24		$	1,683

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Note 10 - Fair Value Measurement (Details) - Financial Instruments Not Carried at Fair Value (Parentheticals)	Sep. 28, 2014	Dec. 29, 2013
Senior Convertible Notes [Member]
Note 10 - Fair Value Measurement (Details) - Financial Instruments Not Carried at Fair Value (Parentheticals) [Line Items]
Debt Instrument, Interest Rate	2.00%	2.00%
Senior Unsecured Notes [Member]
Note 10 - Fair Value Measurement (Details) - Financial Instruments Not Carried at Fair Value (Parentheticals) [Line Items]
Debt Instrument, Interest Rate		7.875%

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Note 16 - Commitments and Contingencies

9 Months Ended

Sep. 28, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

16. Commitments and Contingencies

Purchase Commitments

The Company had $122.6 million of purchase commitments with certain suppliers, primarily for inventory items as of September 28, 2014.

Guarantees and Indemnifications

In the normal course of business, the Company is a party to a variety of agreements pursuant to which it may be obligated to indemnify the other party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations and the unique facts and circumstances involved with respect to each particular agreement. Historically, payments under these types of agreements have not had a material adverse effect on the Company’s business, results of operations or financial condition.

Income Taxes

The Company is subject to audit by the Internal Revenue Service (IRS) and various other tax authorities. The Company has reserved for potential adjustments to the provision for income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities, and the Company believes that the final outcome of these examinations or agreements will not have a material effect on the Company’s results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of tax benefits in the period the Company determines the liabilities are no longer necessary. If the estimates of the federal, state, and foreign income tax liabilities are less than the ultimate assessment, a further charge to expense would result.

Product Warranties

The Company generally offers a one-year limited warranty for all its products. During the three and nine months ended September 28, 2014 and September 29, 2013, changes in the Company’s reserve for product warranty were as follows:

	Three Months Ended						Nine Months Ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013
	(in thousands)
Balance at beginning of period	$	2,513		$	1,127		$	2,055		$	2,124
Provision for warranties issued		519			760			1,890			1,360
Settlements made		(1,076	)		(827	)		(1,525	)		(2,412	)
Changes in reserve for pre-existing warranties during the period		280			106			(184	)		94
Balance at end of period	$	2,236		$	1,166		$	2,236		$	1,166

Legal Matters

In the Matter of Certain Flash Memory Chips and Products Containing the Same, U.S International Trade Commission (Investigation No. 337-TA-893).

On August 1, 2013, Spansion LLC, a wholly owned subsidiary of the Company (Spansion LLC), filed a complaint pursuant to Section 337 of the Tariff Act of 1930, as amended (Tariff Act) 19 U.S.C. § 1337 (Section 337), to request the United States International Trade Commission (ITC) to institute an investigation relating to the unlawful importation into the United States, the sale for importation, and/or the sale within the United States after importation of certain Macronix flash memory chips (Macronix Chips) that infringe certain claims of six valid patents held by Spansion LLC, and/or are made, produced or processed under, or by means of, a process covered by the claims of those patents, and products containing the Macronix Chips.

On September 9, 2013, the ITC instituted its investigation, naming the following entities as Respondents in the investigation: Macronix International Co, Ltd., of Hsin-chu, Taiwan; Macronix America, Inc., of Milpitas, CA; Macronix Asia Limited of Kanagawa Pref., Japan; Macronix (Hong Kong) Co., Ltd., of Sa Tin, N.T., Hong Kong; Acer Inc. of New Taipei City, Taiwan; Acer America Corporation of San Jose, CA; ASUSTek Computer Inc. of Taipei City, Taiwan; ASUS Computer International of Fremont, CA; Belkin International, Inc., of Playa Vista, CA; D-Link Corporation of Taipei City, Taiwan; D-Link System, Inc., of Fountain Valley, CA; Netgear Inc., San Jose, CA; Nintendo Co., Ltd., of Kyoto, Japan; and Nintendo of America, Inc., of Redmond, WA.

Through this investigation, Spansion LLC seeks a general exclusion order to exclude from importation all infringing Macronix Chips and downstream products containing such chips. In the event that the ITC is unwilling to issue a general exclusion order, Spansion LLC requests a limited exclusion order be entered against each named Respondent and its subsidiaries and affiliates in order to remedy the Respondents’ violation of Section 337 and to prevent future violations by Respondents. Spansion LLC has also asked the ITC to issue a cease and desist order to ensure compliance with the requested exclusion orders.

The trial was held before the ITC in Washington, DC on October 2-10, 2014. The ITC has entered a target date of May 22, 2015, for completion of its investigation.

The U.S. Patent and Trademark Office (USPTO) has instituted inter partes review with respect to certain claims under four of the six patents involved in this investigation in response to petitions filed by Macronix. On May 7, 2014, the USPTO instituted inter partes review of claims 1-14 of U.S. Patent No. 6,459,625. On May 8, 2014, the USPTO instituted inter partes review of claims 1-4 of U.S. Patent No. 6,369,416; claims 1, 3-5, 7, 20, and 28 of U.S. Patent No. 6,731,536; and claims 1-6 and 8-13 of U.S. Patent No. 7,151,027, in response to petitions filed by Macronix. Absent a showing of good cause for delay, a final decision is expected in each of these inter partes review proceedings by May 8, 2015. A second petition for inter partes review of claims 7 and 14 of U.S. Patent No. 7,151,027 was filed by Macronix on June 4, 2014, and on August 13, 2014, the USPTO instituted inter partes review of those claims. Absent a showing of good cause for delay, a final decision on that inter partes review is expected by August 13, 2015.    

Spansion LLC v. Macronix International Co., Ltd. et. al., U.S. District Court, Northern District of California (No. 3:13-cv-03566).

On August 1, 2013, Spansion LLC filed a complaint in the U.S. District Court, Northern District of California (San Jose Division), Case No. 3:13-cv-03566-JST, against Macronix International Co., Ltd., Macronix America, Inc., Acer Inc., Acer America Corporation, ASUSTek Computer Inc., ASUS Computer International (America), Belkin International, Inc., D-Link Systems Inc., NETGEAR Inc., Nintendo Co., Ltd., and Nintendo of America, Inc. for infringement of the patents involved in the ITC Investigation No. 337-TA-893 (ITC -893 Investigation), discussed above. Spansion LLC has asked for monetary damages as well as permanent injunctive relief to prevent further infringing activity.

On August 29, 2013, Spansion LLC amended its original complaint to delete certain defendants, resulting in the eleven party defendants identified above (Defendants), and to make certain additional allegations.

On October 8, 2013, pursuant to 28 U.S.C. § 1659, each of the Defendants asserted its statutory right to a mandatory stay of all proceedings in the Northern District of California action until the conclusion of the ITC -893 Investigation. Because the requested stay is mandated by statute, Spansion LLC did not oppose the motion and the requested stay was granted.

Macronix International Co., LTD. v. Spansion Inc. et. al., U.S. District Court, Northern District of California (No. 4:14-cv-01890).

On October 2, 2013, Macronix International Co., Ltd. filed a complaint in the U.S. District Court, Eastern District of Virginia, Case No. 3:13-cv-679-REP, against Spansion Inc. and Spansion LLC for patent infringement of seven Macronix patents. The complaint sought unspecified monetary damages as well as injunctive relief.

Spansion Inc. and Spansion LLC filed an answer to the complaint as well as motions to dismiss and to transfer jurisdiction.

On March 10, 2014 the court ruled favorably on both of Spansion Inc. and Spansion LLC’s motions, ordering Macronix to file an amended complaint and transferring the case to the Northern District of California. Macronix filed an amended complaint and Spansion Inc. and Spansion LLC answered that amended complaint, denying all allegations of infringement and asserting defenses of patent invalidity.

On April 28, 2014, the case was officially transferred to the Northern District of California, Oakland Division (case No. 4:14-cv-01890).

Discovery is proceeding, but no trial date has been set. On August 4, 2014, Spansion Inc. and Spansion LLC filed a motion to stay the case pending the resolution of In the Matter of Certain Devices Containing Non-Volatile Memory and Products Containing the Same, U.S. International Trade Commission Investigation No. 337-TA-922, in which Macronix asserted four of the same patents at issue in this case. A hearing on the motion to stay is scheduled for October 16, 2014. Previously, on July 17, 2014, Macronix filed a motion to leave to amend its complaint to add additional allegations against the Company and several of its customers; a hearing on Macronix’s motion for leave to amend is currently scheduled for December 11, 2014.

In the Matter of Certain Non-Volatile Memory Devices and Products Containing the Same, U.S. International Trade Commission (Investigation No. 337-TA-909).

On December 27, 2013, Macronix International Co., Ltd. and Macronix America, Inc. filed a complaint pursuant to Section 337 to request that the ITC institute an investigation relating to the importation into the United States, the sale for importation, and/or the sale within the United States after importation of certain non-volatile memory devices and products containing such devices. A revised complaint was filed on December 31, 2013, and a letter supplementing the revised complaint was filed on January 14, 2014. The revised complaint alleges that the accused devices infringe certain claims of three patents owned by Macronix (Macronix Patents), and/or are made, produced or processed under, or by means of, a process covered by the claims of the Macronix Patents.

On January 29, 2014, the Commission instituted its investigation, naming as Respondents the following entities: Spansion Inc., Spansion LLC, Spansion (Thailand) Ltd., Beats Electronics LLC of Santa Monica, CA, Delphi Automotive PLC of Gillingham, Kent, United Kingdom, Delphi Automotive Systems, LLC of Troy, Michigan, Harman International Industries, Inc. of Stamford, CT, Harman Becker Automotive Systems, Inc. of Farmington Hills, MI, Harman Becker Automotive Systems GmbH of Karlsbad, Germany, Ruckus Wireless, Inc. of Sunnyvale, CA and Tellabs, Inc. of Naperville, IL.

Through this investigation, Macronix seeks a general exclusion order to exclude from importation all of the allegedly-infringing non-volatile memory devices and downstream products containing such devices. In the event that the ITC is unwilling to issue a general exclusion order, Macronix requests that a limited exclusion order be entered against each named Respondent and its subsidiaries and affiliates in order to remedy the Respondents’ violation of Section 337 and to prevent future violations by Respondents. Macronix has also asked the ITC to issue a cease and desist order to ensure compliance with the requested exclusion orders.

The trial began before the ITC in Washington, DC on October 21, 2014. The ITC has entered a target date of May 4, 2015, for completion of its investigation.

Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd. have filed petitions for inter partes review with the USPTO challenging the validity of the asserted claims of each of the patents asserted by Macronix against Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd. in the ITC -909 Investigation. On July 11, 2014, Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd. filed a petition for inter partes review of claims 1-6 and 10-16 of U.S. Patent No. 6,002,630. On July 21, 2014, Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd. filed a petition for inter partes review of claims 1-8 of U.S. Patent No. 6,552,360. On July 21, 2014, Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd. filed a petition for inter partes review of claims 1-3, 7, and 9-13 of U.S. Patent No. 6,100,557. The USPTO has not yet decided whether to institute proceedings based on Spansion Inc., Spansion LLC, and Spansion (Thailand) Ltd.’s petitions.

In the Matter of Certain Non-Volatile Memory Chips and Products Containing the Same, U.S. International Trade Commission (Investigation No. 337-TA-916).

On April 29, 2014, Spansion LLC filed a complaint pursuant to Section 337 of the Tariff Act to request the ITC institute an investigation relating to the unlawful importation into the United States, the sale for importation, and/or the sale within the United States after importation of certain Macronix non-volatile memory chips (Macronix Chips) that infringe certain claims of four valid patents held by Spansion LLC, and/or are made, produced or processed under, or by means of, a process covered by the claims of those patents, and products containing the Macronix Chips.

On May 29, 2014, the ITC instituted its investigation, naming the following entities as Respondents in the investigation: Macronix International Co, Ltd., of Hsin-chu, Taiwan; Macronix America, Inc., of Milpitas, CA; Macronix Asia Limited of Kanagawa Pref., Japan; Macronix (Hong Kong) Co., Ltd., of Sha Tin, N.T., Hong Kong; Acer Inc. of New Taipei City, Taiwan; Acer America Corporation of San Jose, CA; ADT Corporation of Boca Raton, FL; Amazon.com, Inc. of Seattle, WA; ASRock Inc. of Taipei City, Taiwan; ASRock America, Inc. of Chino, CA; ASUSTek Computer Inc. of Taipei, Taiwan; ASUS Computer International of Fremont, CA; Belkin International, Inc., of Playa Vista, CA; D-Link Corporation of Taipei City, Taiwan; D-Link Systems, Inc., of Fountain Valley, CA; Leap Motion, Inc. of San Francisco, CA; Lowe’s Companies, Inc. of Mooresville, NC; Lowe’s Home Centers, Inc. of Wilkesboro, NC; Microsoft Corp. of Redmond, WA; Nintendo Co., Ltd., of Kyoto, Japan; Nintendo of America, Inc., of Redmond, WA; Sercomm Corp. of Taipei, Taiwan; Vonage Holdings Corp. of Holmdel, NJ; Vonage America Inc. of Holmdel, NJ; and Vonage Marketing LLC of Holmdel, NJ.

Through this investigation, Spansion LLC seeks a general exclusion order to exclude from importation all infringing Macronix Chips and downstream products containing such chips. In the event that the ITC is unwilling to issue a general exclusion order, Spansion LLC requests a limited exclusion order be entered against each named Proposed Respondent and its subsidiaries and affiliates in order to remedy the Proposed Respondents’ violation of Section 337 and to prevent future violations by the Proposed Respondents. Spansion LLC has also asked the ITC to issue a cease and desist order to ensure compliance with the requested exclusion orders.

Discovery is proceeding. Trial is set for March 16, 2015, and the ITC has set the target date for the conclusion of the investigation as October 2, 2015.

Spansion LLC v. Macronix International Co., Ltd. et. al., U.S. District Court, Northern District of California (No. 5:14-cv-01946).

On April 28, 2014, Spansion LLC filed a complaint in the U.S. District Court, Northern District of California, Case No. 5:14-cv-01946, against Macronix International Co, Ltd; Macronix America, Inc.; Acer Inc.; Acer America Corporation; ADT Corporation; Amazon.com, Inc.; ASRock Inc.; ASRock America, Inc.; ASUSTek Computer Inc.; ASUS Computer International (America); Belkin International, Inc.; D-Link Corporation; D-Link Systems, Inc.; Leap Motion, Inc.; Lowe’s Companies, Inc.; Lowe’s Home Centers, Inc.; Microsoft Corp.; Nintendo Co., Ltd.; Nintendo of America, Inc.; Sercomm Corp.; Vonage Holdings Corp.; Vonage America Inc.; and Vonage Marketing LLC for infringement of the same patents asserted in ITC Investigation No. 337-TA-916, referenced above. Spansion LLC has asked for monetary damages as well as permanent injunctive relief to prevent further infringing activity.

On June 23, 2014, pursuant to 28 U.S.C. § 1659, the Defendants asserted their statutory right to a mandatory stay of all proceedings in this Northern District of California action until the conclusion of the ITC Investigation No. 337-TA-916. Because the requested stay is mandated by statute, Spansion LLC did not oppose the motion and the requested stay was granted on June 27, 2014.

In the Matter of Certain Devices Containing Non-Volatile Memory and Products Containing the Same, U.S. International Trade Commission (Investigation No. 337-TA-922).

On June 27, 2014, Macronix International Co., Ltd. and Macronix America, Inc. filed a complaint pursuant to Section 337 to request that the ITC institute an investigation relating to the importation into the United States, the sale for importation, and/or the sale within the United States after importation of certain devices containing non-volatile memory (Spansion Chips) and products containing the Spansion Chips. The complaint alleges that the Spansion Chips infringe certain claims of four patents owned by Macronix (Macronix Patents), and/or are made, produced or processed under, or by means of, a process covered by the claims of the Macronix Patents.

The complaint identifies the following entities as proposed respondents: Spansion Inc., Spansion LLC, Spansion (Thailand) Ltd., Aerohive Networks, Inc. of Sunnyvale, CA, Allied Telesis, Inc. of Bothell, WA, Ciena Corporation of Hanover, MD, Delphi Automotive PLC of Gillingham, Kent, United Kingdom, Delphi Automotive Systems, LLC of Troy, Michigan, Polycom, Inc. of San Jose, CA, Ruckus Wireless, Inc. of Sunnyvale, CA, ShoreTel Inc. of Sunnyvale, CA, Tellabs, Inc. of Naperville, IL, Tellabs North America, Inc. of Naperville, IL, and TiVo Inc. of San Jose, CA.

In its complaint, Macronix seeks a general exclusion order to exclude from importation all of the allegedly-infringing non-volatile memory and downstream products containing such non-volatile memory. In the event that the ITC is unwilling to issue a general exclusion order, Macronix requests that a limited exclusion order be entered against each named Respondent and its subsidiaries and affiliates in order to remedy the Respondents’ violation of Section 337 and to prevent future violations by Respondents. Macronix has also asked the ITC to issue a cease and desist order to ensure compliance with the requested exclusion orders.

On July 29, 2014, the ITC announced institution of an investigation. Trial is set for April 13-17, 2015, and the ITC has set the target date for the conclusion of the investigation as December 4, 2015.

In the Matter of Block Decoded Wordline Driver, Triple Well Charge Pump and Products Containing the Same, Landgericht Mannheim, Germany. 

On July 8, 2014, Macronix International Co., Ltd. filed a complaint in the District Court (or Lendgericht) in Mannheim, Germany, against Spansion LLC, Spansion International, Inc., Polycom GmbH, Harman Becker Automotive Systems GmbH and Ruckus Wireless Inc., for infringement of the German parts of European Patents EP 0 931 379 and EP 1 002 320. Macronix has requested permanent injunctive relief to prevent further infringing activity and seeks an accounting, a recall of infringing devices, reimbursement of costs of the proceedings and confirmation of the defendants’ liability for damages on the merits. Macronix further has requested that the District Court allow preliminary enforcement of the District Court’s decision upon the provision by Macronix of a security bond, should injunctive relief and cost reimbursement be awarded.

Others

In addition to the above matters, the Company is a party to various legal actions that arose in the normal course of business. In the opinion of management, the aggregate liability, if any, with respect to all of these matters will not have a material adverse effect on the Company's financial condition, result of operations or cash flows.

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Note 16 - Commitments and Contingencies (Tables)

9 Months Ended

Sep. 28, 2014

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability [Table Text Block]

	Three Months Ended						Nine Months Ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013
	(in thousands)
Balance at beginning of period	$	2,513		$	1,127		$	2,055		$	2,124
Provision for warranties issued		519			760			1,890			1,360
Settlements made		(1,076	)		(827	)		(1,525	)		(2,412	)
Changes in reserve for pre-existing warranties during the period		280			106			(184	)		94
Balance at end of period	$	2,236		$	1,166		$	2,236		$	1,166

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 28, 2014

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation   

The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, the unaudited interim financial statements reflect all normal and recurring adjustments considered necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The December 29, 2013 condensed consolidated balance sheet data were derived from audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2013, as filed with the SEC on February 25, 2014 and as amended by the Form 10-K/A filed on July 8, 2014, but does not include all disclosures required by U.S. GAAP for annual periods.

         These condensed consolidated financial statements and related notes should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2013 as filed with the SEC on February 25, 2014 and as amended by the Form 10-K/A filed on July 8, 2014. The results of operations for the nine months ended September 28, 2014 are not necessarily indicative of the results that may be expected for any other interim period or for the full fiscal year.

         The Company operates on a 52- to 53-week fiscal year ending on the last Sunday in December. The additional week in a 53-week fiscal year is added to the second quarter to realign the Company’s fiscal quarters more closely to calendar quarters. Fiscal 2014 and fiscal 2013 are comprised of 52-week periods.

 References in this Quarterly Report to “Spansion,” “we,” “us,” “our,” or the “Company” shall mean Spansion Inc. and our consolidated subsidiaries, unless the context indicates otherwise.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

        The unaudited condensed consolidated financial statements include the results of operations of the Company and all of the Company’s wholly-owned subsidiaries. All intercompany accounts have been eliminated.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

        The preparation of the Company’s consolidated financial statements and disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of commitments and contingencies and the reported amounts of revenues and expenses during the reporting periods. Estimates are used to account for the fair value of certain marketable securities, revenue adjustments, the allowance for doubtful accounts, inventory write-downs, valuation of intangible assets, impairment of long-lived assets, legal contingencies, income taxes, stock-based compensation expenses, the fair value of long-term debt, product warranties and pension related liabilities. Actual results may differ from those estimates, and such differences may be material to the Company’s condensed consolidated financial statements.

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Note 11 - Derivative Financial Instruments (Details) - Effect of Derivative Instruments on the Condensed Consolidated Statements of Operations (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 28, 2014		Sep. 29, 2013		Sep. 28, 2014		Sep. 29, 2013
Foreign Exchange Forward Contracts
Net gain reclassified from accumulated OCI into income (ineffective portion) (2)	$ 0	[1]		[1]	$ 0	[1]	$ (2,415)	[1]
Foreign Currency Forward Contracts [Member] | Cost of Sales [Member] | Designated as Hedging Instrument [Member]
Foreign Exchange Forward Contracts
Net loss reclassified from accumulated OCI	2,449				2,449
Foreign Currency Forward Contracts [Member] | Selling, General and Administrative Expenses [Member] | Designated as Hedging Instrument [Member]
Foreign Exchange Forward Contracts
Net loss reclassified from accumulated OCI	129				129
Foreign Currency Forward Contracts [Member] | Research and Development Expense [Member] | Designated as Hedging Instrument [Member]
Foreign Exchange Forward Contracts
Net loss reclassified from accumulated OCI	237				237
Foreign Currency Forward Contracts [Member] | Designated as Hedging Instrument [Member]
Foreign Exchange Forward Contracts
Net unrealized gain (loss) recognized in OCI (1)	2,716	[2]	(391)	[2]	(4,174)	[2]	13,669	[2]
Net loss (gain) reclassified from accumulated OCI into net sales (effective portion)	528		(3,113)		3,511		(7,701)
Foreign Currency Forward Contracts [Member] | Not Designated as Hedging Instrument [Member]
Net gain (loss) recognized in income
Net gain (loss) recognized in income	3,685	[1]	(1,053)	[1]	5,679	[1]	(813)	[1]
Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member]
Net gain (loss) recognized in income
Net gain (loss) recognized in income	0	[3]		[3]	0	[3]	(8)	[3]
Foreign Exchange Option [Member] | Not Designated as Hedging Instrument [Member]
Net gain (loss) recognized in income
Net gain (loss) recognized in income		[1]	$ (197)	[1]		[1]		[1]

[1] Classified in interest income and other, net

[2] Net change in the fair value of the effective portion classified in other comprehensive income (OCI)

[3] Classified in interest expense

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Note 1 - Basis of Presentation

9 Months Ended

Sep. 28, 2014

Disclosure Text Block [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

1. Basis of Presentation   

The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, the unaudited interim financial statements reflect all normal and recurring adjustments considered necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The December 29, 2013 condensed consolidated balance sheet data were derived from audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2013, as filed with the SEC on February 25, 2014 and as amended by the Form 10-K/A filed on July 8, 2014, but does not include all disclosures required by U.S. GAAP for annual periods.

         These condensed consolidated financial statements and related notes should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2013 as filed with the SEC on February 25, 2014 and as amended by the Form 10-K/A filed on July 8, 2014. The results of operations for the nine months ended September 28, 2014 are not necessarily indicative of the results that may be expected for any other interim period or for the full fiscal year.

         The Company operates on a 52- to 53-week fiscal year ending on the last Sunday in December. The additional week in a 53-week fiscal year is added to the second quarter to realign the Company’s fiscal quarters more closely to calendar quarters. Fiscal 2014 and fiscal 2013 are comprised of 52-week periods.

 References in this Quarterly Report to “Spansion,” “we,” “us,” “our,” or the “Company” shall mean Spansion Inc. and our consolidated subsidiaries, unless the context indicates otherwise.

Principles of Consolidation

        The unaudited condensed consolidated financial statements include the results of operations of the Company and all of the Company’s wholly-owned subsidiaries. All intercompany accounts have been eliminated.

Use of Estimates

        The preparation of the Company’s consolidated financial statements and disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of commitments and contingencies and the reported amounts of revenues and expenses during the reporting periods. Estimates are used to account for the fair value of certain marketable securities, revenue adjustments, the allowance for doubtful accounts, inventory write-downs, valuation of intangible assets, impairment of long-lived assets, legal contingencies, income taxes, stock-based compensation expenses, the fair value of long-term debt, product warranties and pension related liabilities. Actual results may differ from those estimates, and such differences may be material to the Company’s condensed consolidated financial statements.

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 28, 2014		Sep. 29, 2013		Sep. 28, 2014		Sep. 29, 2013
Net loss	$ (10,846)		$ (36,904)		$ (45,315)		$ (54,570)
Other comprehensive income (loss), net of tax:
Unrealized gain on recovery from impaired investments reclassified into earnings							(1,200)
Net foreign currency translation gain (loss)	(23)		117		347		(1,420)
Net unrealized gain (loss) on cash flow hedges:
Net unrealized hedge gain (loss) arising during the period	2,716		(391)		(4,174)		13,669
Net gain reclassified into earnings for revenue hedges (ineffective portion)	0	[1]		[1]	0	[1]	(2,415)	[1]
Net unrealized gain (loss) on cash flow hedges	6,059		(3,504)		2,152		3,553
Other comprehensive income (loss), net of tax	6,036		(3,387)		2,499		933
Total comprehensive loss	(4,810)		(40,291)		(42,816)		(53,637)
Revenue Hedges [Member]
Net unrealized gain (loss) on cash flow hedges:
Net loss (gain) reclassified into earnings for revenue hedges (effective portion)	528		(3,113)		3,511		(7,701)
Net loss reclassified into earnings for expense hedges	528		(3,113)		3,511		(7,701)
Expense Hedges [Member]
Net unrealized gain (loss) on cash flow hedges:
Net loss (gain) reclassified into earnings for revenue hedges (effective portion)	2,815				2,815
Net loss reclassified into earnings for expense hedges	$ 2,815				$ 2,815

[1] Classified in interest income and other, net

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Note 11 - Derivative Financial Instruments

9 Months Ended

Sep. 28, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

11. Derivative Financial Instruments

The Company entered into multiple foreign exchange forward contracts to hedge certain operational exposures resulting from movements in Japanese yen exchange rates. The Company’s hedging policy is designed to mitigate the impact of foreign currency exchange rate movements on its operating results. Some foreign currency forward contracts were considered to be economic hedges that were not designated as hedging instruments while others were designated as cash flow hedges. Whether designated or undesignated, these forward contracts protect the Company against the variability of forecasted foreign currency cash flows resulting from revenues, expenses and net asset or liability positions designated in currencies other than the U.S. dollar and they are not speculative in nature.

Cash Flow Hedges

In the third quarter of fiscal 2014, the Company entered into cash flow hedges to protect non-functional currency inventory purchases and certain other operational expenses, in addition to its on-going program of cash flow hedges to protect its non-functional currency revenues against variability in cash flows due to foreign currency fluctuations. The Company’s foreign currency forward contracts that were designated as cash flow hedges have maturities between three and eight months. The maximum original duration of any contract allowable under the Company’s hedging policy is fifteen months. All hedging relationships are formally documented, and the hedges are designed to offset changes to future cash flows on hedged transactions at the inception of the hedge. The Company recognizes derivative instruments from hedging activities as either assets or liabilities on the balance sheet and measures them at fair value on a quarterly basis. The Company records changes in the intrinsic value of its cash flow hedges in accumulated other comprehensive income in the accompanying Consolidated Balance Sheets, until the forecasted transaction occurs. Interest charges or “forward points” on the forward contracts are excluded from the assessment of hedge effectiveness and are recorded in interest and other income (expense), net in the accompanying Condensed Consolidated Statements of Operations. When the forecasted transaction occurs, the Company reclassifies the related gain or loss on the cash flow hedge to revenue or costs, depending on the risk hedged.  In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, the Company will reclassify the gain or loss on the related cash flow hedge from accumulated other comprehensive income to interest and other income (expense), net in its Condensed Consolidated Statements of Operations at that time.

The Company evaluates hedge effectiveness at the inception of the hedge prospectively as well as retrospectively and records any ineffective portion of the hedge in interest and other income (expense), net in its Condensed Consolidated Statements of Operations.

At September 28, 2014, the Company had outstanding forward contracts to sell approximately ¥ 7.5 billion for $72.5 million and to buy approximately ¥ 12.5 billion for $116.0 million

Over the next twelve months, the Company expects to reclassify $2.2 million from accumulated other comprehensive loss to earnings as the related forecasted transactions occur.

Non-designated hedges

Total notional amounts of outstanding contracts were as summarized below:

Buy / Sell	September 28, 2014	December 29, 2013
	(in millions)
Japanese Yen / US dollar	¥ 735.7/$6.8	¥ 2,945/$28.2
US dollar / Japanese Yen	$11.7/¥ 1,276	$42.0/¥ 4,047
US dollar / EUR	$33.9/€ 26.5	$23.4/€ 17.1

          The effect of derivative instruments on the Condensed Consolidated Statements of Operations for the three and nine months ended September 28, 2014 and September 29, 2013 was as follows:

	Three Months Ended					Nine Months Ended
	September 28, 2014		September 29, 2013			September 28, 2014			September 29, 2013
	(in thousands)
Derivatives Designated as Hedging Instruments
Foreign Exchange Forward Contracts
Net unrealized gain (loss) recognized in OCI (1)	$	2,716	$	(391	)	$	(4,174	)	$	13,669
Net loss (gain) reclassified from accumulated OCI into net sales (effective portion)	$	528	$	(3,113	)	$	3,511		$	(7,701	)
Net loss reclassified from accumulated OCI into cost of goods sold	$	2,449	$	-		$	2,449		$	-
Net loss reclassified from accumulated OCI into sales, general and administrative expenses	$	129	$	-		$	129		$	-
Net loss reclassified from accumulated OCI into research and development expenses	$	237	$	-		$	237		$	-
Net gain reclassified from accumulated OCI into income (ineffective portion) (2)	$	-	$	-		$	-		$	(2,415	)
Derivatives Not Designated as Hedging Instruments
Net gain (loss) recognized in income
Swap interest expense (3)	$	-	$	-		$	-		$	(8	)
Foreign Exchange Forward Contracts (2)	$	3,685	$	(1,053	)	$	5,679		$	(813	)
Foreign Exchange Options Contracts (2)	$	-	$	(197	)	$	-		$	-

(1)	Net change in the fair value of the effective portion classified in other comprehensive income (OCI)
(2)	Classified in interest income and other, net
(3)	Classified in interest expense

The gross fair values of derivative instruments on the Condensed Consolidated Balance Sheets as of September 28, 2014 and December 29, 2013 were as follows:

	September 28, 2014				December 29, 2013
Balance sheet location	Derivatives designated as hedging instruments		Derivatives not designated as hedging instruments		Derivatives designated as hedging instruments		Derivatives not designated as hedging instruments
	(in thousands)
Prepaid expenses and other current assets
Foreign Exchange Forward Contracts	$	3,610	$	318	$	-	$	3,493
Accrued liabilities and other
Foreign Exchange Forward Contracts	$	1,983	$	27	$	-	$	313

Changes to the derivative asset or derivative liability position for cash flow hedges result from weakening/strengthening of the Japanese Yen to the US Dollar as of end of quarter.

Offsetting Derivative Assets and Liabilities

The Company presents its derivatives at gross fair values on the Condensed Consolidated Balance Sheets. However, the Company’s master netting and other similar arrangements allow net settlements under certain conditions. The following table sets forth the offsetting of derivative assets as of September 28, 2014 and December 29, 2013.

							Gross amounts not offset on the Condensed Consolidated Balance Sheets but have legal rights to offset
	Gross amounts of recognized Assets		Gross amounts offset in the Condensed Consolidated Balance Sheets		Net amounts of Assets presented in the Condensed Consolidated Balance Sheets		Financial Instruments (1)			Cash collateral pledged		Net amount
	(in thousands)
As of September 28, 2014:
Foreign exchange contracts	$	3,928	$	-	$	3,928	$	(2,709	)	$	-	$	1,219
As of December 29, 2013:
Foreign exchange contracts	$	3,493	$	-	$	3,493	$	(1,572	)	$	-	$	1,921

⁽¹⁾ Financial Instruments as of September 28, 2014 and December 29, 2013 relates to derivative liabilities and the term loan facility which can be net settled against derivative assets in accordance with the Company’s master netting agreements.

The following table sets forth the offsetting of derivative liabilities as of September 28, 2014 and December 29, 2013:

							Gross amounts not offset on the Condensed Consolidated Balance Sheets but have legal rights to offset
	Gross amounts of recognized Liabilities		Gross amounts offset in the Condensed Consolidated Balance Sheets		Net amounts of Liabilities presented in the Condensed Consolidated Balance Sheets		Financial Instruments				Cash collateral pledged		Net amount
	(in thousands)
As of September 28, 2014:
Foreign exchange contracts	$	2,010	$	-	$	2,010	$	(1,601	)	(1)	$	-	$	409
As of December 29, 2013:
Foreign exchange contracts	$	313	$	-	$	313	$	(226	)	(2)	$	-	$	87

(1) Financial Instruments as of September 28, 2014 relates to cash and cash equivalents, short-term investments and derivative assets which can be net settled against derivative liabilities in accordance with the Company’s master netting agreements.

(2) Financial Instruments as of December 29, 2013 relates to derivative assets which can be net settled against derivative liabilities in accordance with the Company’s master netting agreements.

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Document And Entity Information	9 Months Ended
	Sep. 28, 2014	Oct. 29, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	Spansion Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-28
Entity Common Stock, Shares Outstanding		62,052,782
Amendment Flag	false
Entity Central Index Key	0001322705
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Well-known Seasoned Issuer	Yes
Document Period End Date	Sep. 28, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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Note 12 - Employees Related Pension Obligation

9 Months Ended

Sep. 28, 2014

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

12. Employee related pension obligation

A majority of the employees transferred as part of the MCA business acquisition were participants in the Fujitsu Corporate Pension Fund and Retirement Allowance Plan (together, the Fujitsu Defined Benefit Plan) until March 31, 2014. The Company accounted for its participation in the Fujitsu Defined Benefit Plan on behalf of these employees (Plan participants) as a multiemployer plan participant and recorded pension expense of $1.5 million for the quarter ended March 30, 2014.  

On January 15, 2014, the Company received approval from the transferred employees’ union to exit from the Fujitsu Defined Benefit Plan and establish the Spansion defined contribution and cash balance plans.

On April 1, 2014, the Company withdrew from the Fujitsu Defined Benefit Plan and set up the Spansion Corporate Defined Contribution Pension Plan and the Spansion Innovates Group Cash Balance Plan, an unfunded defined benefit plan of our MCA Japan business subsidiaries (Spansion Pension Plans). In accordance with the Stock Purchase Agreement with FSL, the plan assets transferred from the Fujitsu Defined Benefit Plan to the Spansion Pension Plans were valued as of March 31, 2014, one day before the transfer. The Company was not subject to any liabilities upon withdrawal from the Fujitsu Defined Benefit Plan.

          The Company recognized a gain of $2.5 million in the second quarter of fiscal 2014 due to better than expected performance of the total fund assets in the pension plan. This gain was recorded within Interest income and other, net in the Company’s Condensed Consolidated Statement of Operations for the nine months ended September 28, 2014.

           The restricted cash that was received as a part of the MCA business acquisition for the underfunded portion of the Fujitsu managed pension plan was $21.5 million as of September 28, 2014. According to the employees’ election and the expected distribution schedule, the Company recorded $6.1 million in accrued compensation and benefits and $16.3 million in other long-term liabilities on the Condensed Consolidated Balance Sheet as of September 28, 2014. Restricted cash relating to these distributions has been recorded in short term and long term assets as appropriate.

Spansion Innovates Group Cash balance plan (Defined Benefit Plan)

The Spansion Innovates Group Cash balance plan (Cash Balance Plan) provides for the Company to set up a hypothetical cash balance account (CB account) for each plan participant and accumulates at a percentage of the annual pensionable salary and interest thereon. Only employees transferred as part of the MCA business acquisition are eligible to participate in the cash balance plan.

The pension charges under the Cash Balance Plan are based on certain actuarial assumptions, such as turnover rates, discount rates and other factors. The discount rate assumption is determined by comparing the expected benefit payments to the Japanese corporate bonds yield curve as of April 1, 2014. Actual results that differ from these assumptions will be accumulated and amortized over the future life of the plan participants if they exceed 10% of the projected benefit obligation (PBO).

The Company recorded a service cost of $0.3 million for the three months ended September 28, 2014 and accrued a liability of $0.6 million as of September 28, 2014. The Company expects to expense $1.0 million related to the Cash Balance Plan for fiscal year 2014.

Spansion Corporate Defined Contribution Plan

The Company recorded an expense of $0.6 million and $1.2 million under this plan for the three and nine months ended September 28, 2014, respectively, and accrued a liability of $0.2 million as of September 28, 2014.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 28, 2014	Dec. 29, 2013
Current assets:
Cash and cash equivalents	$ 281,991	$ 286,069
Short-term investments	44,778	25,428
Accounts receivable, net	164,933	177,838
Inventories	269,267	254,154
Deferred income taxes	9,282	4,592
Prepaid expenses and other current assets	56,154	52,756
Total current assets	826,405	800,837
Property, plant and equipment, net	189,266	185,505
Intangible assets, net	140,835	167,949
Goodwill	166,334	166,422
Other assets	61,456	60,208
Total assets	1,384,296	1,380,921
Current liabilities:
Accounts payable	153,785	126,680
Accrued compensation and benefits	44,441	57,876
Accrued liabilities and other	149,048	86,352
Income taxes payable	486	4,651
Deferred income	37,745	30,247
Current portion of long-term debt	22,285	97,320
Total current liabilities	407,790	403,126
Deferred income taxes	4,917	3,675
Long-term debt, less current portion	387,284	404,612
Other long-term liabilities	50,385	32,048
Total liabilities	850,376	843,461
Capital stock:
Additional paid-in capital	786,667	747,393
Accumulated deficit	(251,275)	(205,959)
Accumulated other comprehensive loss (Note 5)	(1,534)	(4,033)
Total stockholders' equity	533,920	537,460
Total liabilities and stockholders' equity	1,384,296	1,380,921
Common Class A [Member]
Capital stock:
Common stock	$ 62	$ 59

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Note 6 - Equity Incentive Plan and Stock-Based Compensation

9 Months Ended

Sep. 28, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

6. Equity Incentive Plan and Stock-Based Compensation

Equity Incentive Plan 

The Company’s 2010 Equity Incentive Award Plan (2010 Plan) provides for the grant of stock options, stock appreciation rights, restricted stock units, restricted stock, performance awards, stock payments, dividend equivalents and deferred stock to its employees, consultants and non-employee members of its Board of Directors.

In the first quarter of fiscal 2014, the Company granted performance based restricted stock units (PSUs) to certain senior executives with vesting subject to achievement of performance goals established by the Compensation Committee of the Company’s Board of Directors. Performance goals are based on a combination of Company- specific financial targets, and a relative total shareholder return (TSR) target that compares the Company’s TSR over a three-year period to a benchmark peer-group TSR. These stock awards vest at the end of the performance period of three years from the grant date. The number of stock awards that can vest range from 0% to 150% of those initially awarded. In evaluating the fair value of these awards, the Company used a combination of the stock price at the close of market on grant date for the performance condition, and a Monte Carlo simulation on grant date, taking the market-based goal into consideration, for the market condition.

         In the first half of fiscal 2013, the Company granted PSUs to certain senior executives. The PSUs have vesting percentages ranging from 0% to 100%, calculated based on the relative TSR of the Company’s common stock as compared to the TSR of its peer companies. These awards are divided into two equal tranches, each with an 18 month performance period. The first performance period is from February 1, 2013 through July 31, 2014 and the second performance period is from August 1, 2014 through January 31, 2016. In the third quarter of fiscal 2014, the first tranche of the PSUs vested at 100% based on the relative TSR of the Company’s common stock as compared to the TSR of its peer companies.

2014 Employee Stock Purchase Plan

On May 16, 2014, the stockholders of the Company approved the Spansion Inc. 2014 Employee Stock Purchase Plan (ESPP), which is qualified under Section 423 of the Internal Revenue Code. The ESPP provides that eligible employees may contribute up to 10% of their base salary towards the purchase of the Company’s common stock. The per share purchase price of the employee will be 85% of the fair market value of the stock at the beginning or the end of the offering period, whichever is lower.

The total number of shares of common stock reserved for issuance under the plan is 2.0 million shares. The plan shares will be increased automatically on an annual basis on January 1 of each year. The increase will be equal to one percent of total number of outstanding shares of the Company’s common stock on the immediately preceding December 31, subject to certain restrictions. The initial offering period under the ESPP commenced on August 15, 2014 and ends on February 13, 2015.

         The shares of common stock available for grant under the 2010 Plan are shown in the following table:

	Shares Available For Grant
Balance as of December 29, 2013		2,350,404
Additional shares issuable under 2010 plan (annual increase for 2014)		2,069,902
Stock options forfeited/cancelled through September 28, 2014		299,269
RSUs granted, net of forfeitures/cancellations		(1,211,595	)
Key Executive RSUs forfeited/cancelled through September 28, 2014		357,870
PSUs granted, net of forfeitures/cancellations (1)		(256,000	)
Balance as of September 28, 2014		3,609,850

(1) Includes PSUs granted in fiscal 2014 at target. Additional awards that could be earned under the fiscal 2014 grant total 137,000.

Stock-Based Compensation

           The following table presents the total stock-based compensation expense by financial statement caption resulting from the Company’s stock options, RSUs, PSUs, Key Executive RSUs and the ESPP:

	Three Months Ended				Nine Months Ended
	September 28, 2014		September 29, 2013		September 28, 2014		September 29, 2013
	(in thousands)
Cost of sales	$	1,553	$	1,384	$	4,476	$	4,235
Research and development		2,484		1,952		6,298		7,420
Sales, general and administrative		5,439		3,692		14,304		11,669
Stock-based compensation expense after income taxes(1)	$	9,476	$	7,028	$	25,078	$	23,324

⁽¹⁾ There was no income tax benefit related to stock-based compensation because all of the Company's U.S. deferred tax assets, net of U.S. deferred tax liabilities, continue to be subject to a full valuation allowance.

             In the third quarter of fiscal 2014, the Company also began recording expense on the performance awards granted in fiscal 2011 and fiscal 2012 (Key Executive RSU) as it expects that the performance goals for the year will be met. As of September 28, 2014, the total unrecognized compensation cost related to unvested stock options, RSUs, Key Executive RSUs, PSUs and on the ESPP was approximately $31.7 million after reduction for estimated forfeitures which will be recognized by the end of first quarter of fiscal 2017.

No options were granted during the three and nine months ended September 28, 2014. The fair value of each stock option granted during the three and nine months ended September 29, 2013 was estimated at the date of grant using a Black-Scholes option pricing model, with the following assumptions for grants:

	Three Months Ended			Nine Months Ended
	September 29, 2013			September 29, 2013
Expected volatility		41.84	%		47.06	%
Risk-free interest rate		1.14	%		0.94	%
Expected term (in years)		4.35			4.35
Dividend yield		0.00	%		0.00	%

          The weighted average fair value of the Company’s stock options granted is as follows:

	Three Months Ended		Nine Months Ended
	September 29, 2013		September 29, 2013
Weighted average fair value of stock options granted	$	3.68	$	4.69

The fair value of each PSU award granted in fiscal 2014 and fiscal 2013 was determined using a Monte Carlo pricing model, and was estimated using the following assumptions:

	Nine Months Ended
	September 28, 2014			September 29, 2013
Stock price on grant date	$	16.58		$	11.50
Expected volatility		42.79	%		50.90	%
Risk-free interest rate		0.73	%		0.21	%
Dividend yield		0.00	%		0.00	%

Stock Option and Restricted Stock Unit Activity

          The following table summarizes stock option activities and related information under the 2010 Plan for the periods presented:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Life (in Years)		Value
								(in thousands)
Outstanding stock options as of December 29, 2013		6,542,929		$	13.03		4.42	$	14,061
Granted		-		$	-
Cancelled/Forfeited		(299,269	)	$	15.39
Exercised		(1,236,390	)	$	18.06			$	8,130
Outstanding stock options as of September 28, 2014		5,007,270		$	13.29		3.73	$	46,191
Total vested and exercisable as of September 28, 2014		4,386,657		$	13.63		3.55	$	38,934

No income tax benefit was realized from stock option exercises for the three and nine months ended September 28, 2014.

             The following table summarizes RSU award activities and related information for the nine months ended September 28, 2014:

	RSU
				Weighted Average
	Number of			Grant-date
	Shares			Fair Value
Outstanding as of December 29, 2013		2,384,712		$	14.01
Granted		1,320,531		$	16.13
Cancelled/Forfeited		(108,936	)	$	13.09
Vested		(1,337,996	)	$	12.83
Outstanding as of September 28, 2014		2,258,311		$	15.99

The following table summarizes Key Executive RSUs and PSU award activities and related information for the nine months ended September 28, 2014.

	Key Executive RSU					PSU
				Weighted Average					Weighted Average
	Number of			Grant-date		Number of			Grant-date
	Shares			Fair Value		Shares			Fair Value
Outstanding as of December 29, 2013		974,286		$	12.40		362,000		$	7.38
Granted		-		$	-		274,000	(1)	$	17.94
Cancelled/Forfeited		(357,870	)	$	11.03		(18,000	)	$	7.40
Vested		(318,781	)	$	11.37		(172,000	)	$	7.40
Outstanding as of September 28, 2014		297,635		$	15.15		446,000		$	13.86

(1) Includes performance awards granted in fiscal 2014 at target. Additional awards that could be earned under the fiscal 2014 grant total 137,000.

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Note 5 - Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 28, 2014

Equity [Abstract]

Other Comprehensive Income, Noncontrolling Interest [Text Block]

5. Accumulated Other Comprehensive Income (Loss)

      The following table summarizes the activity related to accumulated other comprehensive loss, net of tax:

	Foreign Currency Translation Adjustment			Net Gains and Losses on Cash Flow Hedges				Total
	(in thousands)
Beginning Balance, December 29, 2013	$	(4,035	)	$	2			$	(4,033	)
Other comprehensive income before reclassification, net of tax		347			(4,174	)			(3,827	)
Amounts reclassified to earnings on cash flow hedges		-			6,326		(1)		6,326
Net other comprehensive income	$	347		$	2,152			$	2,499
Ending Balance, September 28, 2014	$	(3,688	)	$	2,154			$	(1,534	)

(1) Please see note 11 for the further information on the reclassification

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Note 17 - Closure of Chapter 11 Cases

9 Months Ended

Sep. 28, 2014

Reorganizations [Abstract]

Reorganization under Chapter 11 of US Bankruptcy Code Disclosure [Text Block]

17. Closure of Chapter 11 cases

Pursuant to the confirmation of the Plan of Reorganization on April 16, 2010, a claims agent was appointed to analyze and, at his discretion, contest outstanding disputed claims totaling $1.5 billion. On July 16, 2014, a final order was entered by the Bankruptcy Court closing all Chapter 11 cases. The Company recognized a gain of $3.2 million relating to reversal of its reserve for bankruptcy claims during the nine months ended September 28, 2014. This amount has been recorded within Interest income and other, net in the Condensed Consolidated Statement of Operations.

As of September 28, 2014, the Company had resolved all outstanding disputed claims and had distributed the 46,264,760 shares of the Company’s stock that were reserved for holders of allowed general unsecured claims.

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Note 13 - Income Taxes

9 Months Ended

Sep. 28, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

13. Income Taxes

The following table presents the Company’s income tax expense (benefit):

	Three Months Ended					Nine Months Ended
	September 28, 2014		September 29, 2013			September 28, 2014		September 29, 2013
	(in thousands)
Income tax expense (benefit)	$	2,441	$	(1,644	)	$	8,703	$	(891	)

The Company recorded an income tax expense of $2.4 million and an income tax benefit of $1.6 million for the three months ended September 28, 2014 and September 29, 2013, respectively. The Company’s income tax expense was $8.7 million and the income tax benefit was $0.9 million for the nine months ended September 28, 2014 and September 29, 2013, respectively.

The tax expense for the three months and the nine months ended September 28, 2014 was primarily attributable to pre-tax income in foreign jurisdictions and withholding taxes related to licensing revenues.

The tax benefit for the three months and nine months ended September 29, 2013 was primarily attributable to pre-tax income in foreign jurisdictions and withholding taxes related to licensing revenues. This was offset by the release of reserves for uncertain tax positions in foreign locations and the tax impact from the MCA business acquisition.

As of September 28, 2014, all of the Company's U.S. deferred tax assets, net of deferred tax liabilities, continue to be subject to a full valuation allowance. The valuation allowance is based on the Company's assessment that it is more likely than not that the deferred tax assets will not be realizable in the foreseeable future.

As of December 29, 2013, the Company had U.S. federal and state net operating loss carry forwards of approximately $1,016 million and $219.8 million, respectively. Approximately $489.7 million of the federal net operating loss carry forwards are subject to an annual limitation of $27.2 million. These federal and state net operating losses, if not utilized, expire from 2016 to 2033. The Company also has U.S. federal credit carryovers of $3.5 million, which expire from 2020 to 2033. The Company also has state tax credits of $18.2 million, which includes California state tax credits of $17.5 million, which can be carried forward indefinitely.

If the Company were to undergo an “ownership change” for purposes of Section 382 of the Internal Revenue Code of 1986, as amended, its ability to utilize its federal net operating loss carry forwards could be limited under certain provisions of the Internal Revenue Code. As a result, the Company could incur greater tax liabilities than it would in the absence of such a limitation and any incurred liabilities could materially adversely affect the Company’s results of operations and financial condition.

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Note 9 - Financing Arrangements

9 Months Ended

Sep. 28, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

9. Financing arrangements

          The following table summarizes the Company’s debt:

	September 28, 2014		December 29, 2013
	(in thousands)
Debt obligations:
Term Loan	$	294,334	$	296,135
2.00% Senior Exchangeable Notes		115,235		111,733
7.875% Senior Notes		-		94,064
Total debt	$	409,569	$	501,932
Less: current portion		22,285		97,320
Long-term debt	$	387,284	$	404,612

The Company is in compliance of all the covenants under the 2.00% Senior Exchangeable Notes and Term Loan as of September 28, 2014.

2.00% Senior Exchangeable Notes due 2020

The net carrying amount of the liability component of 2.00% Senior Exchangeable Notes due 2020 (the Notes) consists of the following:

	September 28, 2014			September 29, 2013
	(in thousands)
Principal amount	$	150,000		$	150,000
Unamortized debt discount		(34,765	)		(39,391	)
Net carrying value	$	115,235		$	110,609

The following table presents the interest expense recognized on the Notes:

	Three Months Ended		Nine Months Ended		Three and Nine Months Ended
	September 28, 2014		September 28, 2014		September 29, 2013
	(in thousands)
Contractual interest expense at 2% per annum	$	746	$	2,230	$	290
Amortization of debt issuance costs		130		391		50
Accretion of debt discount		1,185		3,502		432
Total	$	2,061	$	6,123	$	772

Capped Calls

In connection with the issuance of the Notes, the Company entered into capped call transactions with certain bank counterparties to reduce the potential dilution to the Company’s common stock upon exchange of the Notes. The capped call transactions have a strike price of approximately $13.87 and a cap price of approximately $18.14, and are exercisable when and if the Notes are converted. If upon conversion of the Notes, the price of the common stock is above the strike price of the capped calls, the counterparties will deliver shares of the Company’s common stock and/or cash with an aggregate value approximately equal to the difference between the price of our common stock at the conversion date (with a maximum price for purposes of this determination equal to the cap price) and the strike price, multiplied by the number of shares of our common stock related to the capped call transactions being exercised. The capped call transactions expire on September 1, 2020.

7.875% Senior Notes due 2017

             On January 21, 2014, the Company redeemed the remaining $94.1 million aggregate principal amount outstanding of the7.875% Senior Notes due 2017 (the Senior Notes) at a redemption price that was 103.938% of their face value. The Company paid an aggregate amount of $99.1 million, including redemption price, accrued and unpaid interest, and repurchase premium, and recorded a loss on redemption of $4.8 million within Interest income and other, net in the Condensed Consolidated Statement of Operations. The Company redeemed these Senior Notes with the proceeds from the issuance of the Notes.

2012 Revolving Credit Facility

As of September 28, 2014, the Company was in compliance with all of the 2012 Revolving Credit Facility’s covenants. However, drawdown under the 2012 Revolving Credit Facility requires that the Company meet or obtain a waiver to certain conditions including the senior secured leverage ratio not to exceed 2.75:1.00 and compliance with coverage and leverage ratios, as of the last day of the most recently ended fiscal quarter. Based on its operating results for the three months ended September 28, 2014, the Company does not meet the maximum leverage ratio limit. The Company has not obtained a waiver for those conditions; accordingly, it is not able to draw down on the 2012 Revolving Credit Facility. The Company did not need to draw on the revolving line of credit during the three months ended September 28, 2014 and believes that its sources of cash and liquidity are sufficient to meet the business requirements for the next 12 months.

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Note 9 - Financing Arrangements (Details) - Interest Expense Recognized on the Notes (Senior Convertible Notes [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 28, 2014	Sep. 28, 2014	Sep. 29, 2013
Senior Convertible Notes [Member]
Note 9 - Financing Arrangements (Details) - Interest Expense Recognized on the Notes [Line Items]
Contractual interest expense at 2% per annum	$ 746	$ 2,230	$ 290
Amortization of debt issuance costs	130	391	50
Accretion of debt discount	1,185	3,502	432
Total	$ 2,061	$ 6,123	$ 772

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Note 7 - Net Income (Loss) Per Share

9 Months Ended

Sep. 28, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

7. Net Income (Loss) Per Share

 The following table presents the computation of basic and diluted net loss per share:

	Three Months Ended						Nine Months Ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013
	(in thousands except for per-share amounts)
Numerator:
Net loss	$	(10,846	)	$	(36,904	)	$	(45,315	)	$	(54,570	)
Denominator:
Denominator for basic / diluted net loss per share, weighted average shares		61,543			58,785			60,705			58,506
Net loss per share:
Basic / Diluted net loss per share	$	(0.18	)	$	(0.63	)	$	(0.75	)	$	(0.93	)
Potentially dilutive shares excluded from the diluted net loss per share computation because their effect would have been anti-dilutive RSUs, PSUs, options and the employee stock purchase plan		7,846			4,441			7,174			4,555
Conversion of Senior Exchangeable Notes		10,814			3,996			10,814			1,352
Total antidilutive shares		18,660			8,437			17,988			5,907

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Note 8 - Intangible Assets and Goodwill

9 Months Ended

Sep. 28, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

8. Intangible Assets and Goodwill

Intangible Assets

          The following table presents the balance of intangible assets as of the dates indicated below:

			September 28, 2014							December 29, 2013
	Estimated range of lives (in years)		Gross Amount (2)		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
			(in thousands)
Developed technology		5 to 10	$	140,976	$	(69,333	)	$	71,643	$	140,476	$	(53,661	)	$	86,815
Customer relationships		5 to 10		110,039		(45,945	)		64,094		110,119		(35,976	)		74,143
Trade names		0.5 to 7		8,079		(5,287	)		2,792		9,478		(5,545	)		3,933
Trademarks		7 to 8		2,700		(394	)		2,306		2,700		(142	)		2,558
IP R&D (1)				-		-			-		500		-			500
Total Intangible Assets			$	261,794	$	(120,959	)	$	140,835	$	263,273	$	(95,324	)	$	167,949

(1) All of the IP R&D reached technological feasibility during the nine months ended September 28, 2014 and was reclassified into developed technology.

(2) The changes in gross balance of intangible assets resulted from the removal of fully amortized assets no longer in use and from foreign currency translation adjustments.

             The actual amortization expense for the intangible assets is as shown below:

	Three Months Ended				Nine Months Ended
	September 28, 2014		September 29, 2013		September 28, 2014		September 29, 2013
	(in thousands)
Amortization expense	$	8,940	$	9,514	$	27,034	$	23,140

The estimated future amortization expense for intangible assets as summarized below:

	Estimated Future Amortization
	(in thousands)
Fiscal 2014 (remaining 3 months)	$	7,929
Fiscal 2015		35,759
Fiscal 2016		35,926
Fiscal 2017		25,061
Fiscal 2018		19,607
Fiscal 2019 and beyond		16,553
Total	$	140,835

Goodwill

          The following table represents the balance of goodwill as of the dates indicated below:

	September 28, 2014		December 29, 2013
	(in thousands)
Goodwill	$	166,334	$	166,422

          The changes in the carrying amount of goodwill since December 29, 2013 resulted from foreign currency translation adjustments.

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Note 10 - Fair Value Measurement

9 Months Ended

Sep. 28, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

10. Fair Value Measurement

              The fair value measurements of the Company’s financial assets and liabilities, categorized into types of instruments, are set forth in the table below based upon the fair value hierarchy:

	September 28, 2014							December 29, 2013
	Level 1		Level 2		Total			Level 1		Level 2		Total
	(in thousands)
Money market funds	$	1,010	$	-	$	1,010	(1)	$	3,906	$	-	$	3,906	(2)
Foreign Exchange Forward Contracts		-		3,928		3,928			-		3,493		3,493
Total financial assets	$	1,010	$	3,928	$	4,938		$	3,906	$	3,493		7,399
Foreign Exchange Forward Contracts			$	2,010	$	2,010		$	-	$	313	$	313
Total financial liabilities	$	-	$	2,010	$	2,010		$	-	$	313	$	313

⁽¹⁾ Total cash and cash equivalents and short-term investments of $326.8 million as of September 28, 2014 includes cash of $280.4 million held in operating accounts, $1.0 million in money market funds, $24.3 million held in certificates of deposit and $21.1 million held in time deposit accounts.

⁽²⁾ Total cash and cash equivalents and short-term investments of $311.5 million as of December 29, 2013 includes cash of $282.2 million held in operating accounts, $3.9 million in money market funds, $11.4 million held in certificates of deposit and $14.0 million in time deposit accounts.

Fair Value of Other Financial Instruments Not Carried At Fair Value

     The Company’s Term Loan and Notes are traded in the market and the fair values are Level 1, as they are based on quoted market prices. Prior to redemption in fiscal 2013, the Senior Notes were traded in the market and the fair value was Level 1. The carrying amounts and estimated fair values of the Company’s debt obligations are as follows:

	September 28, 2014				December 29, 2013
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
	(in thousands)
Debt traded in the market:
Term Loan	$	294,334	$	290,287	$	296,135	$	295,170
2.0% Senior Exchangeable Notes		115,235		199,356		111,733		129,104
7.875% Senior Notes		-		-		94,064		97,591
Total Debt Obligations	$	409,569	$	489,643	$	501,932	$	521,865

   The fair value of the Company’s cash equivalents, accounts receivable, accounts payable and other current liabilities approximates their carrying value.

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Note 10 - Fair Value Measurement (Details) - Financial Instruments Not Carried at Fair Value (USD $) In Thousands, unless otherwise specified	Sep. 28, 2014	Dec. 29, 2013
Note 10 - Fair Value Measurement (Details) - Financial Instruments Not Carried at Fair Value [Line Items]
Carrying Value	$ 409,569	$ 501,932
Estimated Fair Value	489,643	521,865
Term Loan [Member]
Note 10 - Fair Value Measurement (Details) - Financial Instruments Not Carried at Fair Value [Line Items]
Carrying Value	294,334	296,135
Estimated Fair Value	290,287	295,170
Senior Convertible Notes [Member]
Note 10 - Fair Value Measurement (Details) - Financial Instruments Not Carried at Fair Value [Line Items]
Carrying Value	115,235	111,733
Estimated Fair Value	199,356	129,104
Senior Unsecured Notes [Member]
Note 10 - Fair Value Measurement (Details) - Financial Instruments Not Carried at Fair Value [Line Items]
Carrying Value		94,064
Estimated Fair Value		$ 97,591

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Note 11 - Derivative Financial Instruments (Details) In Millions, unless otherwise specified					9 Months Ended
	Sep. 28, 2014 Short [Member] Cash Flow Hedging [Member] Foreign Exchange Forward [Member] USD ($)	Sep. 28, 2014 Short [Member] Cash Flow Hedging [Member] Foreign Exchange Forward [Member] JPY (¥)	Sep. 28, 2014 Long [Member] Cash Flow Hedging [Member] Foreign Exchange Forward [Member] USD ($)	Sep. 28, 2014 Long [Member] Cash Flow Hedging [Member] Foreign Exchange Forward [Member] JPY (¥)	Sep. 28, 2014 Cash Flow Hedging [Member] USD ($)	Sep. 28, 2014 Minimum [Member]	Sep. 28, 2014 Maximum [Member]
Note 11 - Derivative Financial Instruments (Details) [Line Items]
Cash Flow Hedges Maturity						3 months	8 months
Maximum Allowable Duration For Cash Flow Hedges					15 months
Derivative, Notional Amount	$ 72.5	¥ 7,500.0	$ 116.0	¥ 12,500.0
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months					$ 2.2

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Note 10 - Fair Value Measurement (Details) - Financial Assets and Liabilities Categorized Based Upon the Fair Value Hierarchy (USD $) In Thousands, unless otherwise specified	Sep. 28, 2014		Dec. 29, 2013
Note 10 - Fair Value Measurement (Details) - Financial Assets and Liabilities Categorized Based Upon the Fair Value Hierarchy [Line Items]
Financial Assets at Fair Value	$ 4,938		$ 7,399
Financial Liabilities at Fair Value	2,010		313
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Note 10 - Fair Value Measurement (Details) - Financial Assets and Liabilities Categorized Based Upon the Fair Value Hierarchy [Line Items]
Financial Assets at Fair Value	1,010		3,906
Money Market Funds [Member]
Note 10 - Fair Value Measurement (Details) - Financial Assets and Liabilities Categorized Based Upon the Fair Value Hierarchy [Line Items]
Financial Assets at Fair Value	1,010	[1]	3,906	[2]
Foreign Exchange Forward [Member] | Fair Value, Inputs, Level 2 [Member]
Note 10 - Fair Value Measurement (Details) - Financial Assets and Liabilities Categorized Based Upon the Fair Value Hierarchy [Line Items]
Financial Assets at Fair Value	3,928		3,493
Financial Liabilities at Fair Value	2,010		313
Foreign Exchange Forward [Member]
Note 10 - Fair Value Measurement (Details) - Financial Assets and Liabilities Categorized Based Upon the Fair Value Hierarchy [Line Items]
Financial Assets at Fair Value	3,928		3,493
Financial Liabilities at Fair Value	2,010		313
Fair Value, Inputs, Level 1 [Member]
Note 10 - Fair Value Measurement (Details) - Financial Assets and Liabilities Categorized Based Upon the Fair Value Hierarchy [Line Items]
Financial Assets at Fair Value	1,010		3,906
Fair Value, Inputs, Level 2 [Member]
Note 10 - Fair Value Measurement (Details) - Financial Assets and Liabilities Categorized Based Upon the Fair Value Hierarchy [Line Items]
Financial Assets at Fair Value	3,928		3,493
Financial Liabilities at Fair Value	$ 2,010		$ 313

[1] Total cash and cash equivalents and short-term investments of $326.8 million as of September 28, 2014 includes cash of $280.4 million held in operating accounts, $1.0 million in money market funds, $24.3 million held in certificates of deposit and $21.1 million held in time deposit accounts.

[2] Total cash and cash equivalents and short-term investments of $311.5 million as of December 29, 2013 includes cash of $282.2 million held in operating accounts, $3.9 million in money market funds, $11.4 million held in certificates of deposit and $14.0 million in time deposit accounts.

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Note 13 - Income Taxes (Tables)

9 Months Ended

Sep. 28, 2014

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Three Months Ended					Nine Months Ended
	September 28, 2014		September 29, 2013			September 28, 2014		September 29, 2013
	(in thousands)
Income tax expense (benefit)	$	2,441	$	(1,644	)	$	8,703	$	(891	)

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Note 7 - Net Income (Loss) Per Share (Details) - Earnings Per Share Calculation (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2014	Sep. 29, 2013	Sep. 28, 2014	Sep. 29, 2013
Numerator:
Net loss (in Dollars)	$ (10,846)	$ (36,904)	$ (45,315)	$ (54,570)
Denominator:
Denominator for basic / diluted net loss per share, weighted average shares	61,543	58,785	60,705	58,506
Net loss per share:
Basic / Diluted net loss per share (in Dollars per share)	$ (0.18)	$ (0.63)	$ (0.75)	$ (0.93)
Antidilutive Securities	18,660	8,437	17,988	5,907
RSUs and Options [Member]
Net loss per share:
Antidilutive Securities	7,846	4,441	7,174	4,555
Convertible Debt Securities [Member]
Net loss per share:
Antidilutive Securities	10,814	3,996	10,814	1,352

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Note 15 - Capital Structure

9 Months Ended

Sep. 28, 2014

Capital Structure [Abstract]

Capital Structure [Text Block]

15. Capital Structure

Effective January 22, 2014, SLS Spansion Holdings, LLC and its affiliates were no longer holders of at least 5% of the Company’s voting securities. Consequently, the one outstanding share of Class B Common Stock was converted into one share of Class A Common Stock.

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Note 4 - Balance Sheet Components (Tables)

9 Months Ended

Sep. 28, 2014

Disclosure Text Block Supplement [Abstract]

Schedule of Amounts Recognized in Balance Sheet [Table Text Block]

	September 28, 2014			December 29, 2013
	(in thousands)
Cash and cash equivalents
Cash	$	280,421		$	282,163
Cash equivalents:
Money market funds		1,010			3,906
Certificates of deposit		560			-
Cash and cash equivalents	$	281,991		$	286,069
Short-term investments
Time deposits		21,072			14,045
Certificates of deposit		23,706			11,383
Short-term investments	$	44,778		$	25,428
Account receivable, net
Accounts receivable, gross	$	165,320		$	178,252
Allowance for doubtful accounts		(387	)		(414	)
Account receivable, net	$	164,933		$	177,838
Inventories
Raw materials	$	9,892		$	11,056
Work-in-process		211,462			176,601
Finished goods		47,913			66,497
Inventories	$	269,267		$	254,154
Property, plant and equipment, net
Land	$	45,168		$	45,168
Buildings and leasehold improvements		68,855			61,923
Equipment		422,385			385,679
Construction in progress		19,632			19,734
Accumulated depreciation and amortization		(366,774	)		(326,999	)
Property, plant and equipment, net	$	189,266		$	185,505
Accrued compensation and benefits
Accrued vacation	$	12,050		$	11,077
MCA business employees pension related obligation		6,329			22,406
Others		26,062			24,393
Accrued compensation and benefits	$	44,441		$	57,876
Accrued liabilities and other
Short term license liability	$	6,064		$	13,003
Obligation recorded from sale of Sunnyvale property		59,782			-
Litigation reserve		23,570			20,419
Others		59,632			52,930
Accrued liabilities and other	$	149,048		$	86,352
Other long term liabilities
MCA business employees pension related obligation	$	16,978		$	-
Others		33,407			32,048
Other long term liabilities	$	50,385		$	32,048

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Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - RSU Award Activities (Restricted Stock Units (RSUs) [Member], USD $)	9 Months Ended
	Sep. 28, 2014
Restricted Stock Units (RSUs) [Member]
Note 6 - Equity Incentive Plan and Stock-Based Compensation (Details) - RSU Award Activities [Line Items]
Number of Shares	2,384,712
Weighted Average Grant-date Fair Value	$ 14.01
Granted	1,320,531
Granted	$ 16.13
Cancelled/Forfeited	(108,936)
Cancelled/Forfeited	$ 13.09
Vested	(1,337,996)
Vested	$ 12.83
Number of Shares	2,258,311
Weighted Average Grant-date Fair Value	$ 15.99

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Note 5 - Accumulated Other Comprehensive Income (Loss) (Details) - Accumulated Other Comprehensive Loss, Net of Tax (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2014	Sep. 29, 2013	Sep. 28, 2014		Sep. 29, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance, December 29, 2013			$ (4,033)
Other comprehensive income before reclassification, net of tax			(3,827)
Amounts reclassified to earnings on cash flow hedges			6,326
Net other comprehensive income	6,036	(3,387)	2,499		933
Ending Balance, September 28, 2014	(1,534)		(1,534)
Accumulated Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance, December 29, 2013			(4,035)
Other comprehensive income before reclassification, net of tax			347
Net other comprehensive income			347
Ending Balance, September 28, 2014	(3,688)		(3,688)
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance, December 29, 2013			2
Other comprehensive income before reclassification, net of tax			(4,174)
Amounts reclassified to earnings on cash flow hedges			6,326	[1]
Net other comprehensive income			2,152
Ending Balance, September 28, 2014	$ 2,154		$ 2,154

[1] Please see note 11 for the further information on the reclassification

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $)	Sep. 28, 2014	Dec. 29, 2013
Preferred stock par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common Class A [Member]
Common stock par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	61,819,732	58,882,949
Common stock, shares outstanding	61,819,732	58,882,949
Common Class B [Member]
Common stock par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	1	1
Common stock, shares issued	0	1
Common stock, shares outstanding	0	1

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Note 4 - Balance Sheet Components

9 Months Ended

Sep. 28, 2014

Disclosure Text Block Supplement [Abstract]

Supplemental Balance Sheet Disclosures [Text Block]

4. Balance Sheet Components

	September 28, 2014			December 29, 2013
	(in thousands)
Cash and cash equivalents
Cash	$	280,421		$	282,163
Cash equivalents:
Money market funds		1,010			3,906
Certificates of deposit		560			-
Cash and cash equivalents	$	281,991		$	286,069
Short-term investments
Time deposits		21,072			14,045
Certificates of deposit		23,706			11,383
Short-term investments	$	44,778		$	25,428
Account receivable, net
Accounts receivable, gross	$	165,320		$	178,252
Allowance for doubtful accounts		(387	)		(414	)
Account receivable, net	$	164,933		$	177,838
Inventories
Raw materials	$	9,892		$	11,056
Work-in-process		211,462			176,601
Finished goods		47,913			66,497
Inventories	$	269,267		$	254,154
Property, plant and equipment, net
Land	$	45,168		$	45,168
Buildings and leasehold improvements		68,855			61,923
Equipment		422,385			385,679
Construction in progress		19,632			19,734
Accumulated depreciation and amortization		(366,774	)		(326,999	)
Property, plant and equipment, net	$	189,266		$	185,505
Accrued compensation and benefits
Accrued vacation	$	12,050		$	11,077
MCA business employees pension related obligation		6,329			22,406
Others		26,062			24,393
Accrued compensation and benefits	$	44,441		$	57,876
Accrued liabilities and other
Short term license liability	$	6,064		$	13,003
Obligation recorded from sale of Sunnyvale property		59,782			-
Litigation reserve		23,570			20,419
Others		59,632			52,930
Accrued liabilities and other	$	149,048		$	86,352
Other long term liabilities
MCA business employees pension related obligation	$	16,978		$	-
Others		33,407			32,048
Other long term liabilities	$	50,385		$	32,048

The Company’s cash balances are held in numerous locations throughout the world, with the majority in the United States. As of September 28, 2014, the Company had cash, cash equivalents, and short-term investments of $309.4 million held within the United States and $17.4 million held outside of the United States. As of December 29, 2013, the Company has cash, cash equivalents, and short term investments of $298.3 million held within the United States and $13.2 million held outside the United States.

All securities other than the FDIC insured certificates of deposit were designated as available-for-sale. FDIC insured certificates of deposit are held to maturity. Gross unrealized gains and losses on cash equivalents and short term investments were not material as of September 28, 2014 and December 29, 2013. Gross realized gains and losses on cash equivalents and short-term investments were not material for the three months and nine months ended September 28, 2014 and September 29, 2013.

Sale of Sunnyvale property and new headquarters lease

On January 23, 2014, the Company sold its property in Sunnyvale, California, consisting of 24.5 acres of land with approximately 471,000 square feet of buildings that include its headquarters building and submicron development center, a Pacific Gas & Electric transmission facility and a warehouse building, for net consideration of $58.9 million. The Company concurrently leased back approximately 170,000 square feet of the headquarters building on a month-to-month basis with the Company having the option to continue the lease for up to 24 months; thereafter either party can terminate the lease. The first six months of the lease are rent free. For accounting purposes, the rents relating to the rent-free period have been netted against the sale proceeds and represent prepaid rent. The Company’s rent-free use of this building constitutes continuing involvement by the Company as lessee, and recognition of the sale of the property and the related gain is deferred until the lease period ends.

Due to the Company’s continuing involvement under the lease, the cash proceeds net of third-party costs were recorded under the financing method as a short term financing obligation, in accordance with the authoritative guidance on leases and sale of real estate. Interest is imputed on the financing obligation until such time as the sale can be recognized. The property continues to remain on the Company’s condensed consolidated balance sheet and the buildings are being depreciated over their remaining useful life. After the rent-free period, beginning in the third quarter of fiscal 2014, a portion of the lease payments is recorded as a reduction to the financing obligation and the remainder is recognized as interest expense. As of September 28, 2014, $59.8 million was recorded in accrued liabilities and other as a financing obligation. The Company expects to recognize a gain of approximately $38.1 million on the sale of Sunnyvale property in the fourth quarter of fiscal 2014 when the lease ends. It will be recorded within interest income and other, net in the Consolidated Financial Statements.

On May 22, 2014, the Company entered into a new headquarters lease for renting office space in San Jose, California. The lease term is for a period of 12 years, with two options to extend for periods of five years each after the initial lease term. The initial lease term will commence on January 1, 2015 and expire on December 31, 2026.

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Note 9 - Financing Arrangements (Details) - Debt (Parentheticals)	Sep. 28, 2014	Dec. 29, 2013	Sep. 29, 2013
Senior Convertible Notes [Member]
Note 9 - Financing Arrangements (Details) - Debt (Parentheticals) [Line Items]
Interest Rates	2.00%	2.00%	2.00%
Senior Unsecured Notes [Member]
Note 9 - Financing Arrangements (Details) - Debt (Parentheticals) [Line Items]
Interest Rates		7.875%

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Note 11 - Derivative Financial Instruments (Details) - Gross Fair Values of Derivative Instruments on the Condensed Consolidated Balance Sheets (Foreign Exchange Forward [Member], USD $) In Thousands, unless otherwise specified	Sep. 28, 2014	Dec. 29, 2013
Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Foreign Exchange Forward Contracts	$ 3,610	$ 0
Designated as Hedging Instrument [Member] | Accrued Liabilities and Other [Member]
Derivatives, Fair Value [Line Items]
Foreign Exchange Forward Contracts	1,983	0
Not Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Foreign Exchange Forward Contracts	318	3,493
Not Designated as Hedging Instrument [Member] | Accrued Liabilities and Other [Member]
Derivatives, Fair Value [Line Items]
Foreign Exchange Forward Contracts	$ 27	$ 313

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Note 5 - Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 28, 2014

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Foreign Currency Translation Adjustment			Net Gains and Losses on Cash Flow Hedges				Total
	(in thousands)
Beginning Balance, December 29, 2013	$	(4,035	)	$	2			$	(4,033	)
Other comprehensive income before reclassification, net of tax		347			(4,174	)			(3,827	)
Amounts reclassified to earnings on cash flow hedges		-			6,326		(1)		6,326
Net other comprehensive income	$	347		$	2,152			$	2,499
Ending Balance, September 28, 2014	$	(3,688	)	$	2,154			$	(1,534	)

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Note 13 - Income Taxes (Details) - Income Tax Expense (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2014	Sep. 29, 2013	Sep. 28, 2014	Sep. 29, 2013
Income Tax Expense [Abstract]
Income tax expense (benefit)	$ 2,441	$ (1,644)	$ 8,703	$ (891)

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Note 3 - Acquisition (Details) - Pro Forma Consolidated Results of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 29, 2013	Sep. 29, 2013
Pro Forma Consolidated Results of Operations [Abstract]
Net sales	$ 314,701	$ 947,551
Net loss	$ (24,106)	$ (159,988)
Basic	$ (0.41)	$ (2.73)
Diluted	$ (0.41)	$ (2.73)

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Note 14 - Restructuring and Others

9 Months Ended

Sep. 28, 2014

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

14. Restructuring and Others

Beginning in the third quarter of fiscal 2013, in an effort to lower its expense levels, given the competitive pricing pressures and slower than expected growth in Japan revenues from embedded flash solutions products, the Company implemented a reduction in force to rationalize its global workforce.

            The following tables present a summary of restructuring activities related to the 2013 restructuring plan described above:

	Three Months Ended			Nine Months Ended			Three and Nine Months Ended
	September 28, 2014			September 28, 2014			September 29, 2013
Accrued restructuring balance, beginning of period	$	39		$	844		$	-
Provision:
Severance and others		-			-			6,264
Restructuring charges		-			-			6,264
Non-cash adjustments		(15	)		(46	)		(230	)
Cash payments		-			(774	)		(4,351	)
Accrued restructuring balance, end of period	$	24		$	24		$	1,683