Toshiba eyes quadrupling flash memory output-Nikkei

TOKYO, Dec 29 (Reuters) - Japan's Toshiba (6502.T) plans two new flash memory plants, allowing it to quadruple output capacity and putting it in a position to overtake market leader Samsung Electronics (005930.KS), a newspaper reported on Saturday.

The Nikkei business daily said Toshiba Corp, along with its U.S. partner SanDisk Corp (SNDK.O), plans to invest 1.4 trillion yen ($12.5 billion) into the two facilities to be built in Japan.

The electronics maker has four plants producing flash memory, demand for which is surging due to use in devices such as mobile phones. It hopes to have the new facilities ready for production in the 2009 fiscal year starting in April 2009.

The new plants, which will produce NAND flash memory chips used in mobile phones and memory cards for digital cameras, will be equipped to process 300mm silicon wafers, the Nikkei said.

Toshiba has the capacity to make the equivalent of 200,000 wafers a month, and could reach 410,000 wafers in the middle of fiscal 2009 if a recently build plant were to hit its maximum output.

That would be higher than the estimate for South Korean rival Samsung, and together with the production from the two planned facilities, Toshiba will eventually be able to manufacture the equivalent of some 800,000 wafers a month, the Nikkei said.

The paper said Toshiba's investment in the chip business stands at about 300 billion yen a year, but the figure is likely to grow to 400 billion from fiscal 2010 due to the new plants, which are likely to be financed from cash reserves and loans.

The global flash memory market was worth $12.3 billion in 2006, according to survey firm iSuppli Corp, and Samsung held a 45 percent share, followed by 26 percent for Toshiba, the Nikkei said. (Reporting by George Nishiyama; Editing by Jan Dahinten)