Toshiba, Sony tip details on fab venture

As reported in October, Sony plans to sell and transfer to Toshiba its 300-mm wafer line fabrication facilities installed in Fab 2 of Sony Semiconductor Kyushu Corp.'s Nagasaki Technology Center by the end of March 2008.

The deal is worth $835 million. Following the transfer, production on the line will be operated by a joint venture between the companies.

On Wednesday, the companies elaborated on the deal. Toshiba, Sony and Sony Computer Entertainment Inc. have formally signed a definitive agreement to form a new joint venture for the production of high-performance semiconductors. This includes the devices within Sony's PlayStation computer entertainment systems.

Under the terms of the definitive agreement, the joint venture, to be named at a later date, will start operation from April 1, in Nagasaki Technology Center of Sony Semiconductor Kyushu Corp.

It will be 60 percent owned by Toshiba, and Sony and Sony Computer will each take a 20 percent stake.

Within the fiscal year ending March 31, 2008, Toshiba will acquire Sony's 300-mm fab in the Nagasaki Technology Center Fab2, with the exception of some equipment, and plans to loan it to the joint venture at the start of operation.

Manufacturing will start with 65-nm process, and the joint venture will promote migration to 45-nm process mass production, in cooperation with Toshiba's system LSI manufacturing operation in Oita.

Last year, Sony also said it would transfer to Toshiba the assets of Oita TS Semiconductor Corp. (OTSS), a joint venture between Toshiba and Sony. Located within Toshiba's Oita Operations semiconductor plant, OTSS was established to manufacture semiconductors for the PlayStation2 game machine in 1999.

Toshiba will own 51 percent of this venture and Sony will have 49 percent.

In other words, Sony is transferring the advanced plants to Toshiba, marking Sony's shift towards a fab-lite -- or perhaps a fabless -- strategy.

At the same time, Toshiba is taking on more fab capacity. This week, Toshiba announced that it would build two 300-mm fabs, which would be located in Yokkaichi, Mie Prefecture, and in Kitakami, Iwate Prefecture.

One of the new fabs will initially fabricate advanced generations of NAND flash memory and related products. The other fab will provide capacity to meet Toshiba's future semiconductor requirements.

The new fabs will be built on the site of Iwate Toshiba Electronics Co. Ltd., a Toshiba consolidated subsidiary, and adjacent to its Yokkaichi Operations, where four NAND flash fabs are already in operation.

Following completion of all required procedures, construction of the new fabs is expected to start in the spring of 2009, targeting completion in 2010.

Separately this week, Toshiba and SanDisk Corp. also signed a non-binding memorandum of understanding on one of the new fabs, targeting a production start-up date in 2010, and a related production joint venture. Details of the fab, including site location, will be finalized as planning progresses.

In the future, Toshiba plans to discuss with SanDisk their interest in participating in the other new fab.