Toshiba to Buy Out IBM Stake in Dominion Semiconductor Joint Venture - Company Business and Marketing

Cambridge Telcom Report, July 12, 1999

Toshiba America Electronic Components Inc. (TAEC) Tuesday announced that Toshiba Corp. will purchase IBM Corp.'s share of Dominion Semiconductor L.L.C., a semiconductor manufacturing joint venture established by Toshiba and IBM in Manassas, Va.

Transfer of ownership will be completed by December 2000. Details of the purchase agreement were not disclosed.

The Dominion facility, one of the most advanced semiconductor manufacturing fabs in the United States, was established in February 1996 as a L.L.C. joint venture between Toshiba and IBM. First production began in September 1997, bringing together mass production technology from Toshiba and IBM, and the achievements of the 256-megabit (Mb) DRAM development program jointly executed by Toshiba, IBM and Siemens.

Dominion's current production is equivalent to 4 million 64Mb DRAMs per month, with a scheduled increase to 6 million pieces per month by the end of this year. DRAMs produced by Dominion have been marketed independently by Toshiba and IBM.

Beginning immediately, capacity belonging to Toshiba will be gradually increased from the current 50 percent share to 75 percent. In the fourth quarter, 2000, Dominion's capacity currently utilized by IBM will be converted to production of NAND flash, a move that will establish Dominion as an important NAND flash manufacturing facility serving the U.S. market.

This will follow Dominion Semiconductor's transition to 0.20-micron process technology, to be completed by August 1999, enabling efficient volume production of high-performance products, such as 133MHz Synchronous DRAM (SDRAM), 800MHz RDRAM, and 266MHz Double Data Rate SDRAM.

"With the additional capacity available from Dominion, we will expand our production of high-density NAND to meet growing demand for solid-state storage," said Bob Brown, president and chief operating officer of Toshiba America Electronic Components.

"Whether industry demand calls for 133MHz or higher SDRAM, 800MHz 128/144Mb RDRAM, 266MHz DDR SDRAM, or 256Mb NAND flash, Toshiba will be able to respond within the normal production cycle time. As a result of our Scalable by Design approach, all of these high-performance and high-density products are designed with the same 0.20-micron process and can be flexibly manufactured at any of Toshiba's global network of fab facilities.

"Making Dominion a wholly owned subsidiary is an integral part of the global manufacturing strategy underpinning Toshiba Corporation's reorganization of its memory business," said Yasuo Morimoto, president and chief executive officer of Toshiba Semiconductor Co., an in-house company of Toshiba Corp.

"Securing a full-fledged manufacturing site in the U.S. will allow Toshiba to realize stable production and supply of products best suited to market demand, and will significantly strengthen the company's presence in one of the world's central markets. Toshiba will operate Dominion with a long-term perspective and reinforce its manufacturing and engineering capabilities."

Scalable by Design represents Toshiba's commitment to future technologies and is supported by its modular design approach that enables easier and more predictable transition to the next process generation or memory density. To make the most efficient use of the company's wafer fabrication facilities, Toshiba's memory products have been designed for scalability.

By harnessing advances from the trench cell-based 256Mb DRAM development project and applying them to the 64Mb and 128Mb densities, Toshiba can seamlessly scale five generations from 0.35 micron to 0.15 micron with one clean room. The result is smooth and predictable transitions, simplified qualifications and rapid cycling of process and products. Toshiba is carrying these same principles forward in its 256Mb DRAM production plans and across other products.

Toshiba America Electronic Components (TAEC) is the North American engineering, manufacturing, marketing and sales arm of Toshiba Semiconductor Co. and Display Devices and Components Co. TAEC is recognized as one of the world's largest suppliers of semiconductor, electronic component and storage solutions.

Toshiba's Semiconductor Co. is one of the world's leading manufacturers and suppliers of semiconductor products including LSIs, microprocessors and controllers, and advanced memory products, in addition to discrete and bipolar components. The company is also responsible for global sales and marketing of other major electronic components including liquid crystal displays, color display and picture tubes, lithium-ion and other secondary batteries. FMI: http://www.toshiba.com/taec.>

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