MILPITAS, Calif. (AP) -- Memory chip maker SanDisk Corp. said Thursday it has reached a deal to restructure a joint venture with Toshiba Corp., shifting more than 20 percent of the operation's capacity to Toshiba.
SanDisk said the restructuring will include the transfer of equipment lease obligations to Toshiba and a cash payment from Toshiba to SanDisk for equipment owned by their joint venture.
SanDisk said the total value of the transfer is about 80 billion yen ($890 million). Two thirds of that amount will come in the form of reduced lease obligations for SanDisk, while the rest will be paid in cash, the company said.
The company said SanDisk and Toshiba will remain equal partners in the remaining joint venture, which produces flash memory cards.
"This agreement will reduce our capital spending, strengthen our financial position and increase our business flexibility," SanDisk Chief Executive Eli Harari said in a statement.
Memory chip makers have been among the worst hit by falling prices in the semiconductor industry because of overcapacity and falling demand.