Toshiba sets aside $60 million for new flash memory plant

After settling up with Western Digital, Toshiba is set to pump some 7 billion yen ($61.7 million) into its flash memory business. The embattled conglomerate said it was using the investment to procure and prepare land to build a new flash memory plant, in Iwate, Japan.

“Continued strong demand for flash memory from data centers and enterprise servers has already prompted TMC to expands its memory production facilities,” a Toshiba spokesperson said. “With Fab 6 under construction and scheduled for completion at the end of 2018, TMC is now looking further into the future, and moving forward with the construction of an additional 3D flash memory clean room to meet anticipated growth in demand.

“TMC Will complete acquisition of land for the new facility and start site preparation in February next year, and make initial orders for construction materials and equipment at the same time.”

The conglomerate said plans to launch Toshiba Memory Iwate Corp. on Dec. 25 to manage the new facility. Toshiba is currently building a new factory at its flash memory plant in Yokkaichi, Mie Prefecture, which is scheduled for completion by the end of 2018. In November, the firm said it will increase investment in its flash memory production facilities to ¥600 billion for the current fiscal year.

Toshiba also said earlier this month it will continue talks with U.S.-based Western Digital Corp. about jointly investing in the new Iwate plant, however it added that the exact details had not yet been finalised.

It is welcome good news for Toshiba that has suffered a horrendous year. After seven months of negotiations, lawsuits, twists and turns, Toshiba bosses finally penned an $18 billion deal for its chip unit, paving the way for a consortium led by Bain Capital and Apple to take over its memory unit. The deal looked like it was done some time before but Apple demanded new terms at the last minute sparking doubt that the deal would be complete. The consortium also includes SK Hynix, as well as Dell, Seagate Technology and Kingston Technology. Toshiba took the decision to sell off a number of its valuable assets after its nuclear arm Westinghouse was declared bankrupt after racking up insurmountable debt.

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