Tuesday, December 16, 2008

Toshiba, SanDisk to Cut Production of Flash Chips by 30%

Due to the global economic slowdown

On Monday, Toshiba announced that it planned to cut the production of its memory chips by as much as 30 percent, as part of a process that is slated to start sometime next January. The announcement was accompanied by a similar notice on behalf of SanDisk, which operates manufacturing lines jointly with Toshiba. The two companies will cut production at the Yokkaichi Operations plant in Mie Prefecture, citing the slow global demand for semiconductors.

“Recession in the global economy and the slowdown in consumer spending are having a significant impact on demand for semiconductors. This is particularly notable in NAND flash memories, where decreased demand for applications such as memory cards and MP3 players has generated excess supply. Toshiba has fully considered this situation and decided to reduce output at Yokkaichi,” said the company in a recently released statement.

There are four fabs that are currently operational at Toshiba's Yokkaichi Operations plant. While Fab 3 and 4 are meant to develop NAND Flash memories on 300 millimeter (mm) wafers, Fab 1 and Fab 2 use 200mm wafers. According to Toshiba, the 300mm wafer lines will suspend operations for 13 days, while the 200mm wafer lines will only suspend operations for just four days. The measure will be put into place prior to the January production adjustment, during the year-end and the new-year period.

Meanwhile, the Milpitas, California-based SanDisk also announced that it would halt production at the same joint-venture manufacturing facilities in Yokkaichi. The company said that, in Fab 3 and Fab 4, production would be halted between December 31 to January 12.

“The duration and extent of this reduction in fab output will depend upon market conditions," SanDisk said. Toshiba also announced that it would continue to monitor the NAND Flash market, and would review the operation plan at Yokkaichi.