Toshiba, SanDisk Form FlashVision

$700 million flash memory venture

By Jerry Ascierto -- Electronic News, 5/15/2000

Providing further evidence of the explosive demand for flash memory, Toshiba Corp. and SanDisk Corp. last week formed a semiconductor company dubbed FlashVision LLC.

The companies plan to utilize fabrication space at Dominion Semiconductor, located in Manassas, Va., and will spend $700 million to bring that fab up to speed. The companies hope to develop 512Mbit, 1Gbit, and 2Gbit flash memories, along with future generations of devices employing 0.16- and 0.13-micron technology.

"FlashVision will bring together Toshiba's advanced semiconductor process technologies and SanDisk's original multilevel cell technology," said Yasuo Morimoto, president and chief executive officer of Toshiba Corp. Semiconductor Co., Tokyo.

Each company will get 50 percent of Dominion's flash memory production and will separately market and sell their share of the output of the joint venture. The NAND memory wafers produced at Dominion will mostly be used to manufacture flash memory cards for digital cameras, digital music players, and future generations of cell phones, all high-growth areas.

Additionally, the firms plan to develop advanced controllers including Secure Digital Memory Card controllers.

"The markets for the flash memory that will be manufactured at Dominion are projected to grow rapidly in the coming decade," said Eli Harari, president and CEO of SanDisk, Sunnyvale, Calif.

Analysts agree. According to Alan Niebel, managing director of market research firm Web Feet Research, the worldwide market for flash memories is expected to grow from $4.56 billion last year to a record-high $10 billion this year, an increase of 119 percent.

Niebel said that high-volume applications such as cell phones and digital cameras are causing most of the major flash vendors to secure capacity, as flash product lines continue to fly off the shelf.

Demand is far outstripping supply for the rest of 2000, Niebel said. "Everybody is sold out," he said. "This will even extend into 2001 for a few months. And I don't see any dropping in prices toward the end of this year," he added.

Aside from the voluminous cell phone market, flash makers are spurred on by emerging consumer applications. Cahners In-Stat Group forecasts that the digital still camera market will grow from 6.9 million units in 1999 to 15.2 million units in 2001 and that the digital audio player market will grow from 1.4 million units in 1999 to 9.6 million units in 2003.

Toshiba and SanDisk hope that by 2002, the flash memory production capacity of the joint venture will be able to support more than $1 billion in annual sales. Volume production of NAND flash memories is expected to start in the second half of 2001, and high-volume mass production is projected by 2002.