The agreement includes the transfer of equipment lease obligations and a cash payment
Storage company SanDisk has agreed to transfer more than 20% of capacity from its flash manufacturing joint venture to its partner in the venture Toshiba.
It said the cost-cutting measure will include the transfer of equipment lease obligations and a cash payment, but the companies will remain equal partners in the venture. It will retain the option to purchase a part of the transferred capacity from Toshiba on a foundry basis. It also has the option to continue to invest up to 50% in future expansions and technology transitions. In addition, the parties will continue their existing joint technology development in advanced NAND and 3D read/write memory.
Eli Harari, chairman and chief executive at SanDisk, said: This agreement will reduce our capital spending, strengthen our financial position, and increase our business flexibility by allowing us to return more rapidly to our desired captive/non-captive supply model. Importantly, this maintains the economies of scale of Fab 3 and Fab 4 for SanDisk and the deep technology and manufacturing cooperation between SanDisk and Toshiba.
The lease transfers and cash payment are expected to be completed by the end of the first quarter of 2009.