Toshiba, SanDisk to cut Nand flash production

The manufacturers are to cut production by 30 percent at a shared plant in Japan, in response to a recession-related drop in demand

Toshiba and SanDisk, who share a Nand flash manufacturing plant in Japan, have said they are to reduce production from the start of 2009, as a result of the recession.

On Monday, both companies said in statements that they would cut flash-memory production at the Yokkaichi Operations plant by around 30 percent, effective from January. Before that, there will also be temporary complete halts of production, they said.

"Recession in the global economy and the slowdown in consumer spending are having a significant impact on demand for semiconductors," Toshiba said in its statement. "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."

There are four fabs at Yokkaichi — two producing Nand flash on 200mm wafers, and two on 300mm wafers. According to Toshiba's statement, "prior to the January production adjustment, the 300mm wafer lines will suspend operation for 13 days, and the 200mm wafer lines for four days, during the year-end and new-year period".

SanDisk said that market conditions will dictate how long the reduction in output will last and also the extent of the reduction — suggesting there is a possibility the cut could go deeper than 30 percent in the future.

The production slowdown will lead to higher flash prices for device makers. SanDisk said that wafer cost would be higher "due to under-utilisation of capacity".