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SanDisk plans significant cuts in capital spending for 2009

21 October 2008 | By Mark Osborne | News > Fab Management

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Eli Harari,  SanDisk’s Chairman and Chief Executive OfficerSanDisk has made cuts in capital spending for 2008 and 2009 as the over capacity in the NAND flash market is set to continue well into 2009, according to Eli Harari,  SanDisk’s Chairman and Chief Executive Officer in a conference call with a financial analysts yesterday. CapEx for 2008 was expected to be $2.3 billion, but Harari said that it has been reduced by $500 million.

Spending for 2009 had previously been set at $3 billion as it planned to ramp Fab 4 and technology node migrations at Fab 3 and 4. However, the SanDisk executive noted that spending would be cut to only $1.3 billion and would be focused on technology node migration rather than fab expansion. Approximately $300 million of the revised spending plan is not attributed to ‘front-end’ operations.

Bit growth is expected to be less than 100% in 2009 as the capacity ramp at Fab 4 is curtailed. SanDisk expects 43nm devices to make-up two-thirds of bit production by the end of the year and expects to start the transition to 32nm in the second half of 2009. SanDisk is also targeting 50% of its 2009 output to be 3 bit per cell. Die costs are expected to fall by as much as 50 percent due to the node migration and economies of scale the company enjoys at Fab 3 & 4.

Previous CapEx plans

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