New flash plant in Toshiba's future?

Toshiba and partner SanDisk will spend $4.3 billion to build new NAND factory in Japan, according to reports.

Toshiba may invest about $4.3 billion dollars to build new flash memory facility, aiming to triple its manufacturing capacity to catch up Samsung, the current leader in this area.

Toshiba, the second-largest flash memory maker in the world, will work with Sandisk, already a partner, to beef up production of flash memory for mobile phones and other portable devices.

Nihon Keizai, a daily financial newspaper published in Japan, reported Monday that the new facility, to be built in Toshiba's Yokkaichi plant in Japan, is expected to start production in 2007. It will use 300-millimeter wafers and provide 100,000 wafers per month.

Toshiba already has three facilities in that plant that provide 80,000 wafers per month. The company has been increasing its manufacturing capacity, and with the addition of a fourth facility, it aims to raise the volume to 250,000 wafers a month.

In response to the query from CNET Japan, a Toshiba representative said the company is considering building additonal facilities for NAND memory, but has not decided on any specific plan. The company denied the reported schedule, location and investment amount.

Chipmakers have been aggressively raising NAND flash output, shifting production capacity away from less profitable computer memory chips and betting on explosive demand for portable music players, digital cameras and camera phones.

Samsung had a 50.2 percent share in the global NAND flash memory market in the third quarter of 2005, followed by Toshiba's 22.8 percent.

Toshiba has been the main supplier of mini hard-drives for Apple's popular iPod music players. But Apple partly shifted its focus into flash-based players like the iPod Nano and Shuffle. In November, the company said it would prepay $1.25 billion to secure flash memory supply up until 2010 with five leading makers: Samsung, Hynix Semiconductor, Toshiba, Intel and Micron Technology.

Yuhei Iwamoto of CNET Japan reported from Tokyo.
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