PRESS RELEASE: SanDisk and Toshiba to Restructure Flash Manufacturing Joint Ventures
SanDisk Expects to Increase Cash and Reduce Lease Obligations by $1 Billion and Achieve Greater Supply Flexibility
MILPITAS, Calif.--(BUSINESS WIRE)--SanDisk® (NASDAQ:SNDK) announced today that it has entered into a non-binding memorandum of understanding (MOU) with Toshiba Corporation to sell approximately 30 percent of the current manufacturing capacity of the parties’ joint ventures to Toshiba. The move will significantly reduce SanDisk’s capital spending, further strengthen its balance sheet and reduce NAND flash memory production commitments. SanDisk expects to receive cash and reduce equipment lease obligations by approximately $1 billion through this transaction.
SanDisk and Toshiba will continue to be equal partners for the approximately 70 percent capacity of the Fabs that remain in the joint ventures. SanDisk will have the option to purchase a part of the transferred capacity from Toshiba on a foundry basis and will continue to invest up to 50% in future Fab 4 expansions and technology transitions in Fabs 3 and 4. The parties will continue their existing joint technology development in advanced NAND and 3D read/write memory. SanDisk expects the transaction to be completed in the first quarter of 2009.
“We appreciate Toshiba’s strong support for SanDisk through this agreement. This is expected to reduce our capital spending, strengthen our financial position and increase our business flexibility while maintaining the economies of scale of Fabs 3 and 4,” said Dr. Eli Harari, chairman and chief executive officer, SanDisk.
This press release contains certain forward-looking statements, including statements about increasing cash, balance sheet strength, business flexibility and decreased capital commitments that are based on our current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. Risks that may cause these forward-looking statements to be inaccurate include among others: our failure to execute definitive agreements on the terms set forth in the MOU or at all, our failure to implement the changes described in the MOU in a timely or cost-effective manner, and the other risks detailed from time-to-time in our Securities and Exchange Commission filings and reports, including, but not limited to, our most recent annual report on Form 10-K and our subsequent quarterly reports on Form 10-Q.
SanDisk Corporation, the inventor and world’s largest supplier of flash storage cards, is a global leader in flash memory – from research, manufacturing and product design to consumer branding and retail distribution. SanDisk’s product portfolio includes flash memory cards for mobile phones, digital cameras and camcorders, digital audio/video players, USB flash drives for consumers and the enterprise, embedded memory for mobile devices, and solid state drives for computers. SanDisk (www.sandisk.com/corporate) is a Silicon Valley-based S&P 500 company, with more than half its sales outside the United States.
(First posted on Monday, October 20, 2008 at 16:09 EDT)