Sandisk, Toshiba finalize memory production agreement

Sandisk and Toshiba have finalized an agreement to shift their joint production of flash memory chips from the U.S. to Japan, the companies said Friday.

Through their joint venture, Flashvision LLC, the two companies began in June 2001 joint production of flash memory, utilizing the manufacturing plant of Dominion Semiconductor LLC, a unit of Tokyo's Toshiba based in Manassas, Virginia. However, facing increasing losses in the commodity DRAM (dynamic random access memory) business, Toshiba decided in late 2001 to sell Dominion to Micron Technology Inc. and at the same time said it would relocate Flashvision production to its semiconductor fabrication plant in Yokkaichi, Japan.

With the relocation agreement now complete, Flashvision is expected to begin production in Japan in the third quarter of this year and reach full scale production by the first quarter of 2003, the two parent companies said in a statement. To cover Flashvision's needs, Toshiba is producing flash memory for the company until the ramp-up of production at Yokkaichi is complete.

The NAND-type flash memory being produced is being primarily used in memory cards for products such as digital still cameras, PDAs (personal digital assistants) and digital music players. Sandisk, in Sunnyvale, California, is a major vendor of such cards, selling Compact Flash, Smart Media, Memory Stick, MultiMedia Card and Secure Digital cards.

By shifting production to Yokkaichi, which is Toshiba's most advanced semiconductor fab, the companies said they expect to make the shift from 0.16-micron production technology to the more advanced 0.13-micron level. With the move, the companies will be able to squeeze more memory cells onto the surface of each chip and thus create higher capacity memory chips -- something for which there is a growing need as consumers begin to look to memory cards as a medium for storing video taken using digital cameras.

In February, Sandisk and Toshiba said they had succeeded in developing a 1G-bit flash memory chip using 0.13-micron technology. Commercialization of that product is expected sometime in 2006.

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