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Toshiba/SanDisk’s missing fab(s)! |
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Feb 18, 2008 at 03:29 PM |
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Reuters is all over the alleged news that Toshiba and SanDisk are getting ready to start construction of two new 300mm fabs at a cost of $16.7 billion. The news arises from a news story in the Nikkei business daily, which follows on from several other Japanese stories on the subject last week.
Both Toshiba and SanDisk had previously and publicly stated that Fab 5 was on the cards, though there was never any direct mention of two fabs. Only recently, both companies said that there was as yet no decision as to when and where the construction of their next 300mm fab would be, but that a decision to build would be made in 2008.
With that said, if you listen to the latest quarterly conference call from Asyst Technologies, Toshiba’s 300mm AMHS supplier at Fab 4, executives were clear in saying that Fab 4 was continuing to be ramped in phases and that Asyst had ongoing projects to extend the AMHS network at this massive fab throughout 2008.
More importantly, Asyst executives didn’t expect any announcement from its ‘major Japanese client’ on new fab plans in 2008!
Unlike equipment companies, AMHS suppliers get very early warning of a customer’s next expansion plans as the AMHS is a critical design-in. So if anyone outside of Toshiba should know, then Asyst should know.
Also, as Fab 4 is the largest fab ever built with a 210,000wspm-plus capacity, I would not expect Toshiba to have that fab fully ramped for about another year or slightly more. Plenty of time to sit on the fence and ponder when best to start the construction, especially when NAND flash ASPs haven’t recovered and profits are wafer thin!
Any official announcement of a new fab starting construction at this time of the year would only cause more ASP woes in the NAND market.
That said, Toshiba and SanDisk may want to do exactly that as they have what many consider to be the lowest manufacturing costs and so can push competitors into the red without suffering the same fate!
However, I find that rationale less than convincing, but then being in a commodity market often makes people go mad.
The moral of this story is not to take the other stories as fact, not just yet!
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Comment by GUEST on 2008-02-18 17:00:04
The Rumor alone could make competitors rethink their CapEx budgets | Comment by GUEST on 2008-02-18 20:10:46
Editor response: Pam, I agree that Asyst executives didn’t directly name Toshiba in the call. I was simply short cutting that point as it is very well known ‘here’ at least as well as by the financial analysts that Asyst won the AMHS contract at Fab 4.
However, understand the sensitivity companies have to naming names, but I guess that’s our job to reveal as long as we get it right 99 times out of 100!
For the record, Stephen Schwartz said in Asyst’s, Feb 5th 2008 call “ From a NAND Flash standpoint, our exposure is to a pretty large customer who is going to continue to build out a current fab to meet the production requirements. But already, the next fab decision, we anticipate is probably mostly a year from where we thought it was, even six months ago.”
I was also trying to simply highlight that people may take this Reuters news piece as strong indication that construction would start this year. On many previous occasions Japanese companies have announced fab plans just before new financial years in April.
However, I will also stand by the info in this blog originally written about Fab 5 in October last year.
http://www.fabtech.org/content/view/3871/
| Comment by GUEST on 2008-02-18 17:55:24
I think, you should read the report carefully. The next fiscal year for Toshiba starts in April 1, 2008 and ends in March 31, 2009. They probably will start construction in late 2008 or early 2009 so that one of the two planned fabs can start production some time in late 2009 or early 2010! By late 2009 or early 2010, Fab 4 would have been done with the ramp of 210kwpm. These massive fabs take a while to be ready for fab production and they are just planning for them. The boards haven't even approved this decision yet. It is way too early to even inform Asyst and even if they are it is unlikely that they would even talk about it in their CCs because of NDAs.
-Pam | Comment by GUEST on 2008-02-19 12:37:53
Well, Asyst's 3Q sales from AHMS were $68.4MM and are supposed to decline further to $50-60mm in 4Q because of the industry downturn, despite the Fab 4 ramp at Toshiba. But that is not what I was referring to. What I was trying to say is that if you read the wording in the original story as reported in the Nikkei business daily, they said that "the construction for a new Fab will start some time in the FY that begins in April" but some reports are incorrectly reporting this. The construction for Fab 5 has to start some time in late 2008 or early 2009 (both are part of Toshiba's FY which starts in April) so that it is ready for production by the time the ramp at Fab 4 is complete some time in late 2009 or early 2010. Toshiba has no need to even inform Asyst for a while after the decision for Fab 5 is made because even the Fab shell construction is at least 8-10 months away at minimum.
As for the timing of this decision, Toshiba board will decide in a few days and the story leaked, but it sends a strong signal to industry observers that they are leading in NAND development and cost reduction efforts and will become number one supplier by 2008. Those who are trying to ramp NAND further might need to reconsider their plans with the kind of capacity Toshiba/Sandisk are planning to add in the coming years!
-Pam |
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