SanDisk to Expand Japan Fab

It sees an incremental cost of $500 million.
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Flash-memory maker

SanDisk

(SNDK)

unveiled plans to accelerate the expansion of a 300-millimeter wafer fabrication facility in Yokkaichi, Japan.

The move is expected to bring the so-called Fab 3 wafer capacity from the previously planned 48,750 wafers per month to 70,000 wafers per month, by March 2007.

The Sunnyvale, Calif.-based company said its incremental investment is estimated at about $500 million over the next 12 months, with total investment in the facility expected to top $1 billion in 2006. Part of the investment will be financed through operating lease financing or other sources of capital.

The plant is operated by Flash Partners, Toshiba and SanDisk's venture for NAND flash memories.

"We believe that Fab 3 is rapidly becoming one of the most competitive sources of NAND Flash in the world," the company said. "We expect this significant acceleration in production output will further reduce our costs and provide substantial new captive capacity to meet the anticipated growth in demand from new markets such as mobile phones and MP3 players, and enable us to better address geographies where we believe we have attractive opportunities to expand our market presence."

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