Toshiba Ups Flash Production for $1B, Then Cuts It Back

By Chris Preimesberger  |  Posted 2008-12-16 Print this article Print

See this Reuters news item on Dec. 16? "Toshiba and SanDisk are reacting to the ongoing financial crisis by cutting production of their NAND flash memory products by 30 percent. With less demand for desktops, laptops and other types of consumer gadgets this holiday shopping season, Toshiba and SanDisk have opted to cut production of their data storage chips to help balance excess capacity."

An interesting, though not a surprising, move. The NAND flash market has been over-supplied for more than a year, so the cutback shouldn't surprise anybody in the sector. However, there is one itty bitty thing that's odd: Only two months ago, on Oct. 20, Toshiba announced that it would spend a cool $1 billion to purchase 30 percent of SanDisk's flash development output, which it already co-ops with Toshiba.

Okay. So Toshiba buys up 30 percent of SanDisk's flash production. So that means that Toshiba's production goes up by 30 percent. And then, on Dec. 16, Toshiba cuts production by the same amount -- 30 percent.

Does that plus-30/minus-30 "zero out," leaving SanDisk with extra money in the bank and Toshiba holding the proverbial bag? Looks that way to me. Or can someone else 'spain it better'n that? |

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