SAN JOSE, Calif. -- Amid a major downturn in NAND flash, SanDisk Corp. and Toshiba Corp. are delaying their joint fab expansion plans in the arena, according to an analyst.
On Monday (Dec. 15), Toshiba announced an adjustment to production of NAND flash memory at its Yokkaichi Operations plant in Mie Prefecture, Japan. The adjustment will cut production by approximately 30 percent, effective from January 2009.
SanDisk and Toshiba have a joint fab venture in Japan to make NAND flash. Last year, Toshiba (Tokyo), the world's second-largest NAND supplier, moved into production at a new 300-mm fab in Japan. Toshiba and its NAND partner, SanDisk (Milpitas, Calif.), opened Fab 4, a 300-mm fab venture at Toshiba's Yokkaichi operations, near Nagoya, Japan.
This fab venture is called Flash Alliance Ltd. Fab 4 was expected to reach a production capacity of 80,000 wafers a month in the second half of calendar 2008. The first NAND parts from the fab are based on Toshiba's existing 56-nm process. It will also produce parts based on its 43-nm technology.
But the current and horrific NAND downturn has apparently put a damper on those plans. ''SanDisk announced that it was delaying Fab 4's Phase 2 even further, with production not expected to commence until late 2009. Toshiba, SanDisk's partner, is also believed to be delaying production of its portion of Phase 2 until the end of 2009,'' said Joseph Unsworth, an analyst with Gartner Inc. (Stamford, Conn.).
''Unfortunately, these supply-side reductions will have little impact in the first half of 2009, and the prices are expected to continue to fall further, with the potential to force industry consolidation,'' he said.
SanDisk and Toshiba have another flash fab venture. SanDisk has a 49.9 percent ownership interest in Flash Partners Ltd., a business venture with Toshiba, which owns 50.1 percent. Formed in fiscal year 2004, the 300-mm fab continues to produce NAND.
Earlier this year, Toshiba and SanDisk 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.
Toshiba recently closed a 200-mm NAND fab. SanDisk plans to cut its headcount by more than 10 percent this quarter and will cut capital spending in 2009, according to a blog posting last week.
Indeed, the market is gloomy. Most vendors are spilling red ink in the arena. Intel, Hynix, Micron, Numonyx, SanDisk, Toshiba and even Samsung are all suffering in NAND.
''Recession in the global economy and the slowdown in consumer spending are having a significant impact on demand for semiconductors,'' according to Toshiba in a statement. ''This is particularly notable in NAND flash memories, where decreased demand for applications such as memory cards and MP3 players has generated excess supply.''
As a result, Toshiba has decided to reduce output at Yokkaichi. Yokkaichi Operations has four fabs. Fab 3 and Fab 4 produce NAND flash on 300-mm wafers; Fab 1 and Fab 2 on 200-mm wafers.
Prior to the January production adjustment, the 300-mm wafer lines will suspend operation for 13 days, and the 200-mm wafer lines for four days, during the year-end and new-year period.
Toshiba will continue to monitor the NAND market and will review operation plan in Yokkaichi as needed.
As System LSI and Discrete are also facing weak demand for digital consumer products, Toshiba has also reviewed operating dates for its other semiconductor plants during the year-end and new-year period.
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