'Toshiba,SanDisk to build $5.2 bln chip plant'

TOKYO, July 7 (Reuters) Toshiba Corp. and SanDisk Corp. plan to jointly spend about 600 billion yen (.2 billion) to build a new flash memory plant in Japan to better compete with rival Samsung Electronics Co., Japanese newspapers reported on Friday.

The Asahi and Sankei dailies said the two companies will build a NAND-type flash memory factory in Iwate prefecture in northern Japan and begin operations there in 2008/09.

Toshiba, the world's No. 2 maker of NAND-type flash memory, said in May it planned to build its fifth factory for such chips, seeking to boost related sales by 7 percent annually to 7.8 trillion yen in the year to March 2009 from 6.34 trillion yen in 2005/06.

A company spokesman said no details regarding its fifth plant had been decided yet.

Toshiba laid out a plan in May to boost its capital outlays by 80 percent to billion over the next three years, mainly to double its output capacity for NAND flash memory chips to further strengthen its cash cow operations.

REUTERS