Toshiba, Sandisk begin building $2.6B chip plant

Toshiba, Sandisk begin building $2.6B chip plant

Toshiba Corp. and Sandisk Corp. have begun construction of a new factory in Japan that is destined to become a major source of flash memory chips to both companies over the coming years.

The factory is being built at Toshiba's existing plant in Yokkaichi in central Japan and mass production is expected to begin in the latter half of fiscal year 2005, which is the six-month period from October 2005 to March 2006. At that time capacity will be around 10,000 wafers per month and the companies expect a steady rise towards full capacity of 37,500 wafers per month.

Flash memory is used in a wide range of electronics products including digital still cameras, music players, personal computers and PDAs (personal digital assistants) in addition to flash memory storage cards. Unlike most other forms of memory it has the ability to retain information in the absence of power, making it suitable for memory-based portable electronics products.

The two companies already cooperate on development and production of flash memory chips. FlashVision LLC is a joint venture created in 2000 by the two companies. It already operates one plant in Yokkaichi and its output is split between the two companies.

The new plant represents a total investment of ¥270 billion (US$2.6 billion) between now and the end of fiscal year 2006. Toshiba will pay for the construction of the building while FlashVision will pay for the production line. That will leave Toshiba's slice of the total investment at around ¥154 billion and Sandisk's at around ¥116 billion, said Mike Wong, a spokesman for Sandisk.

When the two companies announced initial plans for the factory in December last year they said it would begin production using a 70-nanometer production process. However those plans have been changed.

Current plans call for the new line to begin production using a 90-nanometer process before switching to the more advanced 70-nanometer process in the first half of fiscal year 2006. The 70-nanometer process, which the two companies are currently developing, is expected to debut during the first half of fiscal year 2005 on an existing production line in Yokkaichi, said Wong.

The two companies also said the facility will have space to expand capacity to a maximum of 62,500 wafers per month should they decide to increase further.

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