Toshiba, SanDisk Expand by Building 300-mm Wafer Fabrication Facility

12/5/2003 - Toshiba Corporation and SanDisk Corporation (NASDAQ: SNDK) announced that they intend to cooperate in the construction of a new 300-millimeter (mm) wafer fabrication facility at Toshiba’s Yokkaichi operations in order to meet growing demand for NAND flash memory. The move is expected to allow mass production in the new facility to be advanced to the second half of Toshiba’s FY2005 from the originally planned FY2006 that Toshiba announced last December. Toshiba currently plans to start construction of the building in the first half of FY2004.

Non-volatile NAND flash memory is the storage memory of choice in diverse mobile products, including digital still cameras and multimedia mobile phones. Toshiba invented NAND flash memory and remains a technology and market leader, a position reinforced by its strategic partnership with SanDisk of the U.S.A., a leading maker of memory cards with expertise in high density flash memory and MLC (Multilevel cell) NAND.

The total investment in the new facility (Fab 3) at Toshiba’s Yokkaichi operations is currently estimated at 200 billion yen (equivalent to approximately USD $1.9 billion at the current conversion rates) in the period through the end of FY2005. Toshiba will fund construction of the building, while both Toshiba and SanDisk will provide funds for the manufacturing equipment. Once on line, the facility will be operated by FlashVision, Toshiba and SanDisk’s joint venture for NAND flash memories. The parties will soon commence negotiations of terms of a cooperation agreement for Fab 3 at Toshiba’s Yokkaichi operations.

Initial production of 10,000 wafers a month is expected when the new 300-mm facility comes on line in the second half of FY2005, using 70-nanometer process technology that Toshiba and SanDisk are now jointly developing. Production is expected to increase from the 10,000 wafers per month baseline through greater wafer output and an evolutionary shift to 55nm process in future years.

Commenting on the new facility, Mr. Shigeo Koguchi, company president of Semiconductor Company at Toshiba Corporation, said: “Demand for NAND flash memory is growing fast, on healthy demand for digital consumer devices such as digital still cameras and cell phones with cameras. We expect the market to double in scale in the period 2003 to 2006. We believe bringing forward construction of the new clean room will assure an early increase in our capacity and a greater responsiveness to the needs of a fast growing market.”

Dr. Eli Harari, president and chief executive officer of SanDisk Corporation, said, “Fab 3 at Toshiba’s Yokkaichi operations represents a new phase in our excellent partnership with Toshiba. We expect Fab 3 will be state of the art, supplying us with leading edge, competitive NAND flash memory wafers in high volumes in the second half of this decade. The markets for NAND flash memory are already quite large and are continuing to grow at a rapid pace and are expected to outstrip our existing sources of supply. Our flash cards are used evermore pervasively in numerous consumer electronics and multimedia cell phones. The future output from Fab 3 is expected to become an important element of our strategy to supply the anticipated demand from our OEM and consumer customers.”

About Toshiba Corporation
Toshiba Corporation is a leader in the development and manufacture of electronic devices and components, information and communication systems, consumer products and power systems. Toshiba’s ability to integrate wide-ranging capabilities, from hardware to software and innovative services, assure its position as an innovator in diverse fields and many businesses. In semiconductors, Toshiba continues to build on its world-class position in NAND flash memories, analog devices and discrete devices and to promote its leadership in the fast growing system-on-chip market. Toshiba has approximately 166,000 employees worldwide and annual sales of over US$47 billion.

About SanDisk Corporation
SanDisk Corporation is the world’s largest supplier of flash memory data storage card products. SanDisk, located in Sunnyvale CA, designs and manufactures solid-state data, digital imaging and audio storage products using its patented high density flash memory and controller technology.

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