SanDisk plans to upgrade this year a flash memory plant that it operates with Toshiba in Japan, it said Friday.

The upgrade is part of US$500 million in capital expenditure spending that SanDisk plans to make this year, said Ryan Donovan, a SanDisk spokesman. An earlier report in Japan's Nikkei newspaper that said the entire amount would be spent on the Japanese factory was incorrect, he said.

The money will be used to upgrade production to the most advanced type of flash memory chips: 32-nanometer chips, so called because of the size of the smallest features on the chip surface.

Flash memory is used in numerous consumer electronics gadgets such as cell phones, digital cameras and portable music players, and more advanced production techniques allow for smaller chips or for the storage capacity of single chips to rise. Both are in demand from gadget makers.

Harari also told the newspaper that the unclear outlook for the flash memory market means SanDisk is not ready to commit to building a new flash memory factory with Toshiba. The Japanese company earlier this year postponed plans to build two new chip factories in Japan because of the downturn in the global economy.

SanDisk and Toshiba have cooperated on flash memory development and production for many years.