SanDisk Corp. has announced temporary cuts to its Flash wafer production in its joint-venture manufacturing facilities in Yokkaichi, Japan. Production in Fab 3 and Fab 4 will be temporarily halted from December 31 to January 12.
Following this shut-down, joint venture production will resume at approximately 70% of current capacity. The duration and extent of this reduction in fab output will depend upon market conditions. These steps will result in higher wafer cost due to underutilization of capacity; however, they are expected to better align SanDisk’s captive output in 2009 with the projected demand in the current global economic slowdown.
SanDisk also indicated that it is continuing to work with Toshiba on definitive agreements to restructure the manufacturing joint ventures and expects to sign these agreements in the first quarter of calendar year 2009. A non-binding memorandum of understanding regarding selling a portion of the capacity from the joint ventures to Toshiba was originally announced on October 20, 2008.
SanDisk will provide additional details on these capacity actions when it holds its fourth quarter 2008 earnings results conference call.