SanDisk and Toshiba Sign New Flash Factory Agreement

Toshiba and SanDisk announced on Wednesday a new joint venture agreement for an advanced NAND flash memory chip factory in Yokkaichi, Japan, meant to keep ahead of burgeoning demand for the NAND flash chips to store songs, photos and other digital data.

SanDisk will pay for part of the production equipment at the factory, which will be operated by Toshiba. The companies will share output from the factory. They have worked together for a decade under a number of similar joint venture factory agreements, and also jointly develop NAND flash technology.

"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," the companies said in a joint statement.

Construction of the new chip factory, called Fab 5, has already started. The first phase of the project is expected to be completed early next year, while production at the factory will start in the middle of the year, a Toshiba representative said.

Toshiba declined to say how much it will invest in the Fab 5 project, but the representative said the company's three-year program, which began in April, 2010, is to invest ¥500 billion Japanese yen (US$5.65 billion) in new chip factories and equipment. Around 80 percent of that spending will be aimed at NAND flash memory chip production, he said.

The companies plan to use a number of measures to save energy at the new factory, including LED lighting in the factory and leading edge manufacturing equipment designed to save energy.

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