MILPITAS, Calif. (AP) -- SanDisk Corp., which makes flash memory cards, said Monday it agreed with Japanese electronics maker Toshiba Corp. to sell it about 30 percent of the manufacturing capacity of the companies' joint ventures.
SanDisk expects to receive cash and reduce equipment-lease obligations by about $1 billion with the deal.
SanDisk and Toshiba will continue to be equal partners for about 70 percent of the capacity of the production facilities that remain in the joint ventures.
The deal is expected to be completed in the first quarter of 2009.
SanDisk said the move will reduce capital spending, strengthen its balance sheet and reduce flash-memory commitments.
The memory market is facing a slump due to an oversupply of chips and plunging prices, even though demand is high.
Those pressures have hurt companies including SanDisk, which owns more than a third of the U.S. market for flash memory cards. Last month SanDisk received and rejected a takeover offer from Samsung Electronics Co., but SanDisk left open the possibility for further negotiations if the pot were sweetened.
Analysts have speculated Toshiba might also make a bid but have noted that company is under significant financial pressure compared to Samsung.