Toshiba Starts Construction of Fab 5 for NAND Flash Memory at Yokkaichi
Responding to growing demand for the NAND Flash Memory
Toshiba and SanDisk Sign Joint Venture Agreement
Yokkaichi, Mie, Japan, July 14, 2010 — Toshiba Corporation (Tokyo: 6502) today announced that it has started construction of a state-of-the-art fabrication facility (fab), Fab 5, at Yokkaichi Operations, its memory production facility in Mie Prefecture, with construction work scheduled for completion in Spring 2011. Toshiba and SanDisk Corporation (NASDAQ: SNDK), a Milpitas, California based company, today announced that they have signed primary agreements for a new joint venture to operate in the Fab 5 facility.
Construction of the new fab reflects expectations for increasing demand for NAND flash memory for existing and emerging applications, such as smartphones and solid-state drives. Adding new production capacity will ensure that Toshiba and SanDisk are able to respond quickly and decisively to market expansion and further strengthen their competitiveness.
The fab building will be constructed in two phases, with the pace of investment reflecting market trends. On completion of its second phase, Fab 5 will be comparable to Fab 4, with a ground area of some 38,000m2. The partners have flexibility as to the extent and timing of their respective fab capacity ramps, and the output allocation will be in accordance with the proportionate level of equipment funding. The initial manufacturing process will be the leading-edge 20-nanometer generation, with subsequent generations to follow.
Mr. Kiyoshi Kobayashi, Corporate Senior Vice President of Toshiba Corporation, President and CEO of Semiconductor Company said, "Constructing the new facility assures our ability to respond to continued strong demand in the NAND flash memory market. With our partner SanDisk, we will increase the manufacturing capacity gradually in accordance with market conditions, in a way that further enhances our competitiveness in the memory business."
Dr. Eli Harari, Chairman and Chief Executive Officer, SanDisk said, "Today's agreement builds on a successful ten-year partnership with Toshiba that has led to the development of eight generations of industry-leading multi-level cell NAND flash memory. Customer demand for flash memory continues to grow rapidly, and our investment in Fab 5 will provide us highly cost effective supply, while giving us the flexibility to tailor the rate of capacity expansion to match our demand requirements. Fab 5 represents a strategic commitment to further strengthen our leadership in the fast growing flash markets over the coming decade."
Fab 5 will have a quake-absorbing structure and is designed to impose minimal environmental impacts. Extensive use of LED lighting throughout the facility, leading edge energy-saving manufacturing equipment, and use of inverter-controlled pumps for semiconductor production equipment are expected to cut CO2 emissions to a level 12% lower than for Fab 4.
Yokkaichi Operations currently has four NAND flash memory fabs. Toshiba and SanDisk are currently ramping into the unused clean room space in Fab 4, and expect to reach full capacity of Fab 4 by the start of production in Fab 5.
Toshiba and SanDisk will each, through joint ventures, including Fab 5, make timely investments in NAND Flash memory, and will continue to jointly develop new technologies in order to enhance their competitiveness in the memory business.
Outline of Fab 5
|Structure of building:||2-Story steel frame concrete, five floors|
|Ground area:||Approximately 38,000m2|
|Total floor area:||Approximately 187,000m2|
|Construction start:||July 2010|
|Completion of first phase:||Spring 2011 (Planned)|
Outline of Yokkaichi Operations
|Location:||800, Yamanoisshiki-cho, Yokkaichi, Mie Prefecture|
|General Manager:||Koji Sato|
(as of end of March, 2010, regular employees only for Toshiba)
|Site area:||Approximately 436,800 m2 (including Fab 5)|
|Total floor area:||Approximately 647,000m2 (including Fab 5)|
* SanDisk's operations in Yokkaichi include approximately 250 engineers under the leadership of SanDisk Japan President and General Manager, Dr. Atsuyoshi Koike.
Toshiba is a world leader and innovator in pioneering high technology, and a diversified manufacturer and marketer of advanced electronic and electrical products spanning information & communications systems; digital consumer products; electronic devices and components; power systems, including nuclear energy; industrial and social infrastructure systems; and home appliances. Toshiba was founded in 1875, and today operates a global network of more than 740 companies, with 204,000 employees worldwide and annual sales surpassing 6.3 trillion yen (US$68 billion). Visit Toshiba's web site at www.toshiba.co.jp/index.htm.
SanDisk Corporation is the global leader in flash memory cards, from research, manufacturing and product design to consumer branding and retail distribution. SanDisk's product portfolio includes flash memory cards for mobile phones, digital cameras and camcorders; digital audio/video players; USB flash drives for consumers and the enterprise; embedded memory for mobile devices; and solid state drives for computers. SanDisk is a Silicon Valley-based S&P 500 company, with more than half its sales outside the United States.
This press release contains forward-looking statements concerning future plans, strategies and the performance of Toshiba Group. These statements are based on management's assumptions and beliefs in light of the economic, financial and other data currently available. Furthermore, they are subject to a number of risks and uncertainties. Toshiba therefore wishes to caution readers that actual results might differ materially from our expectations. Major risk factors that may have a material influence on results are indicated below, though this list is not necessarily exhaustive.
- Disputes including lawsuits in Japan and other countries;
- Success or failure of alliances or joint ventures promoted in collaboration with other companies;
- Success or failure of new businesses or R&D investment;
- Changes in political and economic conditions in Japan and abroad; unexpected regulatory changes;
- Major disasters, including earthquakes and typhoons;
- Rapid changes in the supply/demand situation in major markets and intensified price competition;
- Significant capital expenditure for production facilities and rapid changes in the market;
- Changes in financial markets, including fluctuations in interest rates and exchange rates.
SANDISK FORWARD LOOKING STATEMENTS
This news release contains certain forward-looking statements, including statements about demand in the flash memory market, our timing expectations for first wafer outs, expected production focus at Fab 5, the cost-effectiveness of the supply produced at Fab 5, the timeline for construction, expansion and capacity of Phase 1, expectations as to the timing, construction and size of Phase 2, expectations as to Phase 2 memory production, expansion plans in Fab 4, captive capacity expectations, the supply we expect from Fab 5 and the demand for that supply and the benefits we expect to receive from the Fab 5 venture. There are a number of risks and uncertainties that may cause these forward-looking statements to be inaccurate including, among others:
- the venture's ability to obtain and maintain an adequate supply of raw materials, as well as the price it pays for such materials;
- general business and economic conditions;
- trends in the flash memory industry;
- the venture's ability to ramp the new production lines and realize expected manufacturing yields, efficiencies and cost-effectiveness;
- construction and manufacturing difficulties or delays;
- our ability to meet the funding requirements of Fab 5; and
- the other risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in our Securities and Exchange Commission filings and reports, including, but not limited to, our Annual Quarterly Report on Form 10-Q for the fiscal quarter ended April 4, 2010.
Future results may differ materially from those previously reported. We do not intend to update the information contained in this release.
SanDisk and the SanDisk logo are trademarks of SanDisk Corporation, registered in the United States and other countries. Other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s).