Flash memory manufacturer SanDisk said today it has reached an agreement with Toshiba Corp. to sell approximately 30% of the current manufacturing capacity of the companies' joint ventures to Toshiba.
According to a release, SanDisk said the move will significantly reduce its capital spending, further strengthen its balance sheet and reduce NAND flash memory production commitments. In addition, the comapny expects to receive cash and reduce equipment lease obligations by approximately $1 billion.
The two companies will continue to be equal partners for the approximately 70% capacity of the Fabs that remain in the joint ventures. SanDisk will have the option to purchase a part of the transferred capacity from Toshiba on a foundry basis and will continue to invest up to 50% in future Fab 4 expansions and technology transitions in Fabs 3 and 4.
The parties will continue their existing joint technology development in advanced NAND and 3D read/write memory. SanDisk expects the transaction to be completed in the first quarter of 2009.
"We appreciate Toshiba's strong support for SanDisk through this agreement. This is expected to reduce our capital spending, strengthen our financial position and increase our business flexibility while maintaining the economies of scale of Fabs 3 and 4," said Dr. Eli Harari, Sandisk's chairman and CEO.