Toshiba and SanDisk mark construction start of 300mm wafer fab for NAND flash memory at Yokkaichi operations

Toshiba and SanDisk continue technology and market leadership

August 4, 2006 — /BUSINESS WIRE/ — TOKYO & MILPITAS, Calif. — Toshiba Corporation (Minato-ku, Tokyo, Japan) and SanDisk(R) Corporation (Milpitas, CA, USA) today announced that, further to definitive agreements that the companies entered into in July 2006, construction has started of Fab 4, a 300-millimeter (mm) wafer fab, in Yokkaichi, in Mie Prefecture, Japan.

The NAND flash memory market is growing fast, on healthy growth in a wide range of digital electronic applications, including MP3 music players, mobile phones and several kinds of memory cards. Toshiba and SanDisk started operation of a state-of-the-art 300-millimeter (mm) wafer fab, Fab 3, in summer 2005, at Yokkaichi Operations, and have boosted the facility’s capacity to meet market demand. Today’s start of construction reflects the need for a new facility, in parallel with expansion of Fab 3, in order to meet anticipated demand for NAND flash memory products in 2008 and beyond.

Investment in Fab 4 over the two years from April 2006 to March 2008 is expected to reach about 300 billion yen. Toshiba will fund construction of the building and Flash Alliance, Ltd., a new joint venture between Toshiba and SanDisk for Fab 4, will fund the fab’s advanced manufacturing equipment. The production output from Fab 4 will be equally shared between Toshiba and SanDisk.

Fab 4 is expected to come on line in the fourth quarter (Oct-Dec) of 2007, with an initial capacity of 2,500 wafers a month. It is currently estimated that the capacity of 67,500 wafers a month will be reached by the fourth quarter of 2008. At the time of production start-up, Fab 4 is intended to employ cutting-edge 56-nanometer (nm) process technology and to subsequently migrate to finer geometries.

In order to limit impact on operations from natural disasters, Fab 4 will adopt the latest earthquake-absorbing structure that is expected to dampen quake force by almost two-thirds. It will also deploy superconducting magnetic energy storage (SMES) that is designed to be triggered instantaneously by any sudden, momentary loss of power supply, from a lightning strike for example, to prevent any impact on production.

Through construction of Fab 4, Toshiba and SanDisk will continue to expand production capacity. Combined with advanced process technology and multi-level cell technology, this expansion is expected to allow the companies to further enhance their competitiveness and secure continued leadership in the NAND flash memory market.

Note: 1 nanometer = one billionth of a meter

Outline of Fab 4 at Yokkaichi Operations
— Structure of Building: Steel frame concrete, five stories (two CR stories)
— Building Area: approx. 35,500m2
— Floor Area: approx. 181,000m2
— Area of Clean Room: approx. 48,800m2
— Start Construction: August, 2006
— Completion of Building: July 2007 (plan)
— Start Production: 4Q (October – December), 2007(plan)

Outline of Yokkaichi Operations
— Location: 800 Yamanoisshiki-cho, Yokkaichi-shi, Mie Prefecture, Japan
— Established: 1992
— General Manager: Noriyoshi Tozawa
— Employees: Approx. 2,200
— Total Site Area: Approx. 312,300m2
— Total Floor Area: Approx. 260,000m2 (excluding new 300mm facility [Fab 4])

Outline of Flash Alliance, Ltd.
— Location: 800 Yamanoisshiki-cho, Yokkaichi-shi, Mie Prefecture, Japan
— Established: July, 2006
— President: Yasuo Naruke
— Capitalization: 3 million yen
— Holding: Toshiba: 50.1%, SanDisk: 49.9%

Forward-Looking Statements

This press release contains certain forward-looking statements, including statements about our business outlook, technological advancements, construction timetables, construction plans to reduce risk of damages from earthquakes or power interruptions, production schedules, geometries, expected output and effects on financial performance, costs of new fab facilitization and supply and demand that are based on our current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate and may significantly and adversely affect our business, financial condition and results of operations. These risks and uncertainties are discussed in detail under the title “Risk Factors” and elsewhere in the documents we file from time to time with the SEC, including in our Annual Report on Form 10-K for our 2005 fiscal year and our Quarterly Reports on Form 10-Q.

SanDisk is a trademark of SanDisk Corporation, registered in the United States and other countries.

SanDisk(R) Corporation
Hidenari Morohashi, 81-45-474-0962 (Japan)
Ken Castle, 408-801-7032
[email protected]
Toshiba Corporation
Corporate Communications Office, 03-3457-2105


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