Online information source for semiconductor professionals

SanDisk reveals increased capital spending through 2010

28 February 2008 | By Síle Mc Mahon | News > Fab Management

Popular articles

New Product: Applied Materials new EUV reticle etch system provides nanometer-level accuracy - 19 September 2011

Oberai discusses Magma’s move into solar PV yield management space - 29 August 2008

‚??Velocity‚?? the new buzzword in Intel‚??s PQS annual awards - 12 April 2012

Applied Materials adds Jim Rogers to Board of Directors - 29 April 2008

TSMC honors suppliers at annual Supply Chain Management Forum - 03 December 2008

ToshibaSanDisk executives revealed detailed capital expenditure plans through 2010 at the company’s annual financial analysts day, held on February 26th. SanDisk is the joint manufacturing partner of Toshiba for NAND flash memory. Despite an ASP decline of 60 percent in each of the last two years, SanDisk is projecting its own share of the capital equipment burden to increase sequentially, reaching a peak of $3 billion in 2009. 

Judy Bruner, SanDisk’s CFO, noted that capital spending in 2007 actually exceeded original projections due to the improved capacity capability of its mainstream 300mm facility with Toshiba, Fab 3. SanDisk spent $1.857 billion in 2007 compared to the $1.375 billion projection at the beginning of last year.

Capital equipment spending will also rise in 2008 to $2.4 billion as it upgrades Fab 3 to fabricate finer geometries after reaching an upwardly revised capacity of 150,000wspm at the end of 2007. However, the bulk ($1.65 billion) will be allocated to the ramp of Fab 4, which started volume production in Q407. SanDisk expects Fab 4 to reach 110,000wspm by the end of 2008 - approximately 50 percent of its total wafer capacity.

However, 2009 is the peak year for spending in its current forecast through 2010 at $3 billion. A further $1.5 billion is earmarked for Fab 4’s final expansion phase to full capacity, while approximately $500 million will be allocated to test, assembly and packing plant expansions. Only $100 million is set to be spent in relation to Fab 5, which was recently announced to begin construction in 2009.

In 2010, spending will see its first decline in more than five years, yet will still be significant at $2.4 billion. $1 billion is set to be spent on Fab 5 equipment while Fabs 3 and 4 will still see investments of approximately $500 million in total.

The spending decline in 2010 is due to the new fab funding arrangement SanDisk has struck with Toshiba in which it will only have a 25 percent stake in the fab operation compared to its 50 percent stakes in Fabs 3 and 4. This reduces its capital commitment to the operations by 25 percent and will procure its other 25 percent of output under a ‘preferred foundry’ pricing deal.

SanDisk is also allocating approximately $200 million in equipment spending for 2009/10 to ready production of its next-generation 3D NAND memory devices.

SanDisk is projecting total capital expenditure of $7.8 billion between 2008 and 2010.

SanDisk

Related articles

SanDisk plans significant cuts in capital spending for 2009 - 21 October 2008

SanDisk cuts capex again for 2009 - 10 December 2008

Samsung Electronics in talks to acquire SanDisk - 05 September 2008

IC Insights: Foundry capital spending set for record year - 08 February 2011

Samsung snubs SanDisk - 22 October 2008

Reader comments

No comments yet!

Post your comment

Name:
Email:
Please enter the word you see in the image below: