DOW JONES NEWSWIRES 
 

Samsung Electronics Co. (005930.SE) agreed to pay Spansion Inc. (SPSN) $70 million to settle patent lawsuits, and the two companies exchanged patent rights in licenses and covenants.

"This agreement is a significant milestone in the company's strategy to further develop its (intellectual property) business," said Spansion Chief Executive John Kispert, adding that the agreement strengthens Spansion's cash position.

Memory-chip maker Spansion filed for bankruptcy protection last month, saying changed market conditions made it unable to service its debt load. The settlement requires approval of the bankruptcy court.

Before the bankruptcy filing, Spansion, formerly a joint venture of Advanced Micro Devices Inc. (AMD) and Fujitsu Ltd. (FJTSY), said it would reduce its global work force of about 8,900 by 3,000. Memory-chip makers have been struggling with low prices because of oversupply for about two years.

Spansion sued Samsung Electronics in November, seeking to block U.S. imports of some hit products, including iPods and BlackBerrys. It accused the company of violating its patents covering technologies used in flash memory, a variety of chip that is a mainstay in portable devices such as music players, digital cameras and computers.

Spansion's shares soared 63% to 23 cents in after-hours trading from the Tuesday close of 14 cents. The stock price has fallen 29% in 2009.

-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com