Artist's impression of the new fab, Yokkaichi Operations
Samsung is the world`s number one seller of computer memory chips with a 34.7% market share, followed by Toshiba with a 32.2% market share.
Now Toshiba, the world’s second-largest NAND flash memory chipmaker, decided to make an investment in a 3D V-NAND flash memory production facility in partnership with US-based semiconductor company SanDisk. Both companies are going to equally share the cost of the investment and inject 700 billion yen (7.419 trillion won, US$6.843 billion) for three years at the Yokkaichi Operation plant, the company’s memory production facility in Mie prefecture, Japan. At first, they estimated the amount at 400 billion yen. However, it nearly doubled after the two firms agreed to invest in the construction of a new facility and the replacement of the existing one.
An increase in investment can be interpreted as Toshiba’s willingness to not lag behind its rival companies like Samsung Electronics, SK Hynix, and Micron. Given that Samsung completed the construction of its 3D V-NAND production facility in Xian, China on May 9, competition between Korean and Japanese firms to dominate the next-gen semiconductor memory market is expected to heat up again.
Samsung began to mass-produce 3D V-NAND flash memory chips in its plant in Xian. 3D V-NAND flash memory where 40nm-class NAND flash memory is stacked up in 24 layers are twice as fast and last 10 times longer than 20nm-class planar NAND flash memory. The world’s largest computer memory chipmaker is planning to dominate the market by developing 3D V-NAND flash memory chips in a 36-layer stack soon.
SK Hynix, the world's fourth-largest manufacturer of computer memory chips, is focusing on investing in NAND flash memory. For example, the firm converted its Cheongju M12 Plant that produced both DRAM and NAND flash memory chips into a NAND flash line last year in order to restructure the company whose focus was on DRAM. The chip-maker plans to mass-produce 3D V-NAND at the end of this year. Micron, which is in the third spot, recently changed its DRAM factory in Singapore into a NAND flash plant.
Unlike its rivals, Toshiba only manufacturers NAND flash memory. Therefore, if competitors outperform the Japanese firm in the global NAND flash memory market, it will be fatal. Industry analysts are saying that Toshiba's lawsuit filed in March against SK Hynix for technology leakage despite its patent cross-licensing deal with the Korean firm was aimed at checking the Korean chip-maker's influence.
Press Release:
Toshiba to Replace Fab 2 at Yokkaichi Japan for Transition to 3D NAND Technology
- Toshiba and SanDisk Sign Memorandum of Understanding -
TOKYO, Japan— Toshiba Corporation (Tokyo: 6502) today announced that it will demolish the No. 2 semiconductor fabrication facility (Fab 2) at Yokkaichi Operations, the company’s NAND Flash memory plant in Mie prefecture, Japan, and replace it with a new fab on the same site. Toshiba also entered into a non-binding memorandum of understanding with SanDisk Corporation (NASDAQ: SNDK) to invest jointly in the new facility. The primary purpose of the new wafer fab is to secure space for converting existing Toshiba and SanDisk 2D NAND capacity to 3D NAND beginning in 2016.
Demolition work on the current Fab 2 will start in May with construction beginning in September 2014, with a target completion date of Summer 2015. The clean room within the new fab will be built in phases to align the clean room investment with the timing of conversion of 2D NAND capacity to 3D NAND. Construction of the initial cleanroom will be complete in time for 2016 output. Decisions on capacity conversion ramp and equipment investment, the start of production, and production levels in the new fab will reflect market trends.
The new fab will provide a supplementary facility for processes mainly dedicated to 3D NAND memory production, and work in close cooperation with Yokkaichi’s other facilities. Toshiba and SanDisk will support 3D memory production with leading-edge manufacturing equipment for lithography, deposition and etching through joint ventures.
Yasuo Naruke, Corporate Senior Vice President of Toshiba Corporation and President and CEO of Semiconductor & Storage Products Company, said, “Our determination to develop advanced technologies underlines our commitment to respond to continued demand of NAND flash memory. We are confident that our joint venture with SanDisk will allow us to produce cost competitive next generation memories at Yokkaichi.”
Sanjay Mehrotra, President and Chief Executive Officer of SanDisk, said: “We are pleased to continue our long-standing collaboration with Toshiba in this new wafer fab, which will advance our leadership in memory technology into the 3D NAND era.”
The new fab will have a quake absorbing structure and an environmentally friendly design that includes LED lighting throughout the building. It will also be equipped with the latest energy saving manufacturing equipment, which will secure productivity advances while lowering power consumption. Highly efficient use of waste heat will help to lower fuel consumption and cut CO2 emissions by 15% compared to Fab 5, currently the most advanced fab on the Yokkaichi site.
Toshiba and SanDisk will, through joint ventures, maximize investment efficiency in the transition to 3D NAND by making full use of the Yokkaichi site. Going forward, the companies will continue to jointly develop advanced process technology, and make investments to meet market requirements.
About Toshiba
Toshiba is a world-leading diversified manufacturer, solutions provider and marketer of advanced electronic and electrical products and systems. Toshiba Group brings innovation and imagination to a wide range of businesses: digital products, including LCD TVs, notebook PCs, retail solutions and MFPs; electronic devices, including semiconductors, storage products and materials; industrial and social infrastructure systems, including power generation systems, smart community solutions, medical systems and escalators & elevators; and home appliances.
Toshiba was founded in 1875, and today operates a global network of more than 590 consolidated companies, with 206,000 employees worldwide and annual sales surpassing 5.8 trillion yen (US$61 billion). Visit Toshiba's web site atwww.toshiba.co.jp/index.htm
About SanDisk
SanDisk Corporation (NASDAQ: SNDK), a Fortune 500 and S&P 500 company, is a global leader in flash storage solutions. For more than 25 years, SanDisk has expanded the possibilities of storage, providing trusted and innovative products that have transformed the electronics industry. Today, SanDisk’s quality, state-of-the-art solutions are at the heart of many of the world's largest data centers, and embedded in advanced smart phones, tablets and PCs. SanDisk’s consumer products are available at hundreds of thousands of retail stores worldwide. For more information, visit www.sandisk.com.
SanDisk Forward-Looking Statements
This news release contains certain forward-looking statements, including statements about demolition and construction schedules, our timing expectations for first wafer outs, expected production focus at the new clean room, development of new technologies and products and leadership in NAND memory. There are a number of risks and uncertainties that may cause these forward-looking statements to be inaccurate including, among others: general business and economic conditions; the ability to ramp the new production lines and realize expected manufacturing yields, efficiencies and cost-effectiveness; construction and manufacturing difficulties or delays; the failure to reach definitive agreements or the other risks detailed from time-to-time in our Securities and Exchange Commission filings and reports, including, but not limited to, our most recent quarterly report on Form 10-Q. We do not intend to update the information contained in this release.
Public Relations & Investor Relations Team:
Midori Hara
Toshiba Corporation
+81-3-3457-2100
Media Contact:
Michael Diamond
SanDisk Corporation
+1-408-801-1108
Investor Contacts:
Jay Iyer
SanDisk Corporation
+1-408-801-2067
Brendan Lahiff
SanDisk Corporation
+1-408-801-1732
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