SAN FRANCISCOToshiba Corp. plans to begin construction later this year on a new semiconductor fab to build NAND flash memories on a site adjacent to existing Toshiba fabs in the city of Yokkaichi, in Japan's Mie prefecture, the company said Tuesday (March 23).
Toshiba, the world's No. 2 NAND vendor behind Samsung Electronics Co. Ltd., provided few details about the fab or its projected costs. Last month, several reports out of Japan, citing the Nikkei business daily as their source, said Toshiba would spend 800 billion yen (about $8.9 billion) to build a new fab Yokkaichi.
Toshiba currently has four NAND fabs at the company's Yokkaichi operations. The company said it has "given careful consideration to the timing of the start of construction of the new fab, most notably in light of the fall in demand that followed the global recession in the fall 2008."
Toshiba (Tokyo) had originally planned to build the fab, Fab 5, at Yokkaichi last year, but officially postponed the construction in January of 2009 amid the IC downturn and global recession. Like other memory chip vendors, Toshiba cut capacity investments last year due to the general economic climate and brutal pricing environment for memory chips.
NAND prices began to rebound later in 2009 and shot up by 5 percent in the fourth quarter of the year alone, according to market research firm iSuppli Corp. According to Jim Handy, a NAND and SSD analyst at research firm Objective Analysis, a NAND supply shortage that began last March is expected to keep pricing firm into 2011.
With demand recovering thanks to the market penetration of smartphones and other new applications, Toshiba said the company believes the time is right to construct a new fab. Adding production capacity will help Toshiba "respond quickly and decisively to market expansion" and strengthen the company's competitiveness in semiconductors, Toshiba said.
Construction of Fab 5 is set to begin in July and expected to be completed by the spring of 2011, Toshiba said.
The scale of Fab 5 will be comparable with that of Toshiba's Fab 4, currently in operation at Yokkaichi, Toshiba said. The facility will have an earthquake-absorbing structure and be designed for minimal environmental impact, the company said. Energy-saving clean rooms and effective use of waste heat are expected to cut carbon dioxide emissions to a level 12 percent lower than from Fab 4, Toshiba said.