Oversupply of NAND flash memory in the retail market, for application in USB memories and memory cards, has resulted in continual price declines since the beginning of this year. Toshiba has responded by adjusting shipments to the retail market since June and from today will reduce the operating rate at the plant in order to adjust output. This move will help to reduce inventory in the market and improve the overall balance between supply and demand, which is good for manufacturer, but which is not good for the end-user.
High growth rates are forecast for PCs and smartphones, the drivers of global market demand of NAND flash memory, and the supply and demand balance is expected to improve in the current quarter, from July to September. Along with this, Toshiba will implement a timely production adjustment to encourage early restoration of the balance in supply and demand and improve the overall market conditions ahead of the anticipated rise in demand. Toshiba will continue to closely monitor the NAND market and re-examine production at Yokkaichi as necessary.
Earlier this year Toshiba, the world's second largest producer of NAND flash memory, announced plans to expand its Fab 5 manufacturing facility at Yokkaichi Operations, the company's NAND flash memory production facilities in Mie Prefecture, Japan. The expansion of Fab 5 will start operations in 2013. The construction works are supposed to begin this summer, but it is unclear whether Toshiba plans to proceed with the expansion plan now.
Toshiba's Fab 5 is a five-floor building with 187 thousand square meters of the total floor space. Fab 5 started volume production of NAND flash in July, 2011, using 24nm process technology. The fab is believed to be in process of transitioning to 19nm manufacturing process at the moment.