SanDisk Nearly Becomes Fabless Flash Memory Vendor

From X-bit Labs: SanDisk on Thursday said that it had signed a definitive agreement with Toshiba to restructure the Flash manufacturing joint ventures operating at the 300mm Fab 3 and Fab 4. The result of the agreement will be basic SanDisk’s transition to fabless flash-based products manufacturing,

As part of the agreement, more than 20% of the joint-ventures’ capacity will be transferred to Toshiba. Back in October, 2008, Toshiba virtually gained control over 30% of the joint ventures’ (by signing memorandum of understanding), which means that now the Japanese electronics conglomerate controls all the flash capacities the belonged to joint ventures between SanDisk and Toshiba.

The restructuring will result in the transfer of equipment lease obligations from SanDisk to Toshiba and a cash payment to SanDisk for the transfer of certain equipment currently owned by the joint ventures. The total value to SanDisk is approximately ¥80 billion (approximately $890 million) based on current exchange rates. Approximately 66% of the total amount will reduce SanDisk’s current equipment lease obligations by about 28% and approximately one-third will be received by SanDisk in cash. The lease transfers and cash payment are expected to be completed by the end of the first calendar quarter of 2009.

SanDisk and Toshiba will remain equal partners for the capacity remaining in the joint ventures. SanDisk will have the option to purchase a part of the transferred capacity from Toshiba on a foundry basis and retains the option to continue to invest up to 50% in future Fab 4 expansions and technology transitions in Fab 3 and Fab 4. In addition, the parties will continue their existing joint technology development in advanced NAND and 3D read/write memory.

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