Memory

Toshiba and SanDisk Arguing About Simple Matters

A profitable long standing relationship strained

By Alexandru Pancescu, Hardware Editor

8th of September 2007, 11:16 GMT

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Toshiba and SanDisk formed a partnership over eight years ago in an attempt to stay competitive on the fast growing and very volatile flash memory market. As the global demand for flash based memory solutions is increasing it put strains over the supply chain and flash manufacturers are trying to meet the demand by increasing the production. As a given production plant can only make some flash chips, most manufacturers are looking at the prospect of building more facilities and increasing their total output.

The two companies are now at odds with each other over the building site of the new flash memory chips production facility and while these differences are unlikely to result in a breaking partnership, they very well may

have important consequences for the entire NAND manufacturing industry and the $12 billion annual market. The Japanese company Toshiba is the second largest NAND flash memory chips maker in the world after the Korean Samsung Electronics and together with the California based SanDisk, it invested over $5 billion in two flash memory producing factories since the two manufacturers joined hands in 1999. The partnership between Toshiba and SanDisk is a beneficial alliance for both producers as the NAND memory chips made by Toshiba were integrated into flash storage cards made by SanDisk, allowing them to dominate a big chunk of the market.

Now their relationship is somewhat strained and under pressure as the Japanese company wants to built the factory in Japan while SanDisk wishes to inspect other potential building sites. "The market and the technology can change very quickly," Atsuyoshi Koike, president of SanDisk's Japan unit, said on the sidelines of an event held to release new products, who was cited by the news site zdnet.com. "We want to be as open and flexible as possible." As the NAND flash market is currently dominated by Samsung, further delays in the building of the production factory could put an end to Toshiba's ambitions at beating off other competitors like Hynix Semiconductor. Because the Japanese company is meeting a high demand of NAND memory chips and the market projection for the coming years is looking at an accelerated growing trend for electronics using flash storage solutions, Toshiba wants the construction of the new facility started as soon as possible and named March 2008 as the deadline for negotiations.

According to SanDisk chief executive officer Eli Harari, his company did not yet make a definitive decision but Japan is not a very liked option, mainly because of earthquakes which caused in 2004 major disruptions at another hardware manufacturing company, Sanyo Electric. On the other hand, Toshiba is very firm on its position and the company's president Atsutoshi Nishida said earlier this week on the sidelines of the opening ceremony for its new chip factory that a foreign site is simply unthinkable.

TAGS:

Toshiba | SanDisk | flash | NAND | production

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