Toshiba and SanDisk have agreed to reallocate wafer output and equipment ownership and funding at their two joint venture NAND flash memory fabs.
The new allocation will give Toshiba sole ownership of 30% of the total capacity.
The remaining 70% will still be owned by the SanDisk/Toshiba joint ventures, with that capacity divided equally between Toshiba and SanDisk.
In September, SanDisk rejected an unsolicited takeover bid from Samsung Electronics, the leading supplier of NAND flash chips.
At the time of that takeover bid there was speculation, if successful, how the bid would affect SanDisk’s longstanding fab joint ventures with Toshiba. Toshiba is known to have plans to build its NAND flash business in a bid to catch market leader Samsung.
Today’s agreement can be seen as a move to secure more of the joint flash production in that bid. As a result, Toshiba's overall allocation of capacity in the two fabs will increase by about 30%.
By expanding its production capacity efficiently, Toshiba aims to increase sales of NAND flash memories.
Toshiba said it expects the NAND flash memory market to continue to grow in the medium to long term with average annual bit growth rate of more than 200%.
“Sole ownership of some 30% of the total capacity of the two fabs will allow the company to be even more flexible in making decisions on production volumes in line with changes in market demand,” said Toshiba.
The joint venture covers Fab 3 and Fab 4 at Toshiba's Yokkaichi operations, which are currently operated by Flash Partners, Ltd. and Flash Alliance, Ltd., the production joint ventures between Toshiba and SanDisk.
Investment in the manufacturing equipment installed at the two fabs is equally shared by Toshiba and SanDisk through the JVs, with the same capacity allocated to each company.