In April,, Toshiba and its NAND partner, SanDisk, unveiled plans for Fab 4, to be built on Toshiba's Yokkaichi premises. The 300-mm fab will produce 100,000 wafers a month and is slated to begin operating in the fourth quarter of 2007.

On July 7, SanDisk closed a transaction with Toshiba under which SanDisk and Toshiba created a new semiconductor company under the Fab 4 roof, dubbed Flash Alliance Ltd., according to a filing by the U.S. company. Under the terms, Flash Alliance will be 49.9 percent owned by SanDisk and 50.1 percent by Toshiba (Tokyo).

With the creation of Flash Alliance, SanDisk and Toshiba are further expanding their current business relationship. In 2000, SanDisk and Toshiba formed a 200-mm fab venture, dubbed FlashVision.

In 2004, SanDisk and Toshiba formed an additional venture, Flash Partners, to equip a new 300-mm NAND wafer fabrication facility.

"The capacity of Fab 4 at full expansion is expected to be greater than 100,000 wafers per month and the timeframe to reach full capacity is to be mutually agreed by the parties," according to the SanDisk filing.

"To date, the parties have agreed to an expansion plan to 67,500 wafers per month for which the investment in Fab 4 is currently estimated at approximately $3.0 billion through the end of 2008, of which SanDisk's share is currently estimated to be approximately $1.5 billion," according to the filing.

"Initial NAND production is currently scheduled for the end of 2007. SanDisk will be entitled to 50 percent of the total wafer output," according to SanDisk. "For expansion beyond 67,500 wafers per month, it is expected that investments and output would continue to be shared 50/50 between SanDisk and Toshiba.