Toshiba, SanDisk Invest $1.5B in Joint Flash Facility
In separate announcements, SanDisk Corp. and Toshiba announced increased investment in their joint 300mm fab in Yokkaichi, Japan.
SanDisk Wednesday said the plant, dubbed Fab 3, is expected to ramp up wafer capacity from 48,750 wafers per month to 70,000 wafers per month by March 2007. Original expectations for output in March 2007 were 40,000 wafers a month.
The incremental investment by SanDisk for 50 percent of this higher Fab 3 output is currently estimated at approximately $500 million over the next 12 months. SanDisk's total expected 2006 investment in Fab 3 is approximately $1 billion, of which a portion is anticipated to be financed through operating lease financing or other sources of capital.
"We believe that Fab 3 is rapidly becoming one of the most competitive sources of NAND flash in the world,” said Eli Harari, president and CEO of SanDisk, in a statement. “We expect this significant acceleration in production output will further reduce our costs and provide substantial new captive capacity to meet the anticipated growth in demand from new markets such as mobile phones and MP3 players, and enable us to better address geographies where we believe we have attractive opportunities to expand our market presence.
Independently, Toshiba today announced that it was increasing its capex by about $531 million (63 billion Japanese yen), most of which will be channeled into expanding capacity at Fab 3.
Toshiba uses 70nm process technology already in its Yokkaichi's 200mm-wafer fab that will be also be deployed in Fab 3. Fab 3 is also slated to transition to 52nm process technology.
Fab 3 is operated by Flash Partners Ltd., Toshiba and SanDisk's joint venture for NAND flash memories that was established in September 2004.