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Technology Stocks : WDC/Sandisk Corporation

WDC 152.20

-3.7%

Nov 4 3:59 PM EST

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To: Art Bechhoefer who wrote (11130)	5/29/2000 7:15:00 AM
From: Ausdauer	Read Replies (1) of 60323

SanDisk Card Assembly Patents Abroad An Independent Appraisal [FROM: Raging Bull SanDisk Thread, author "rmmcc70"] "I am not a registered user of Silicon Investor so I cannot post there. But I would like to make a comment in reference to your May 16, 2000 post (Reply #11095)... You mentioned that Toshiba and Hitachi are "component companies" and SNDK is a "card company". This is true. But Toshiba and Hitachi are also card companies. Hitachi sells CF cards in Japan and other parts of the world. They do not sell in the USA because of various reasons. One is they would probably be sued by SNDK if they did. Actually SNDK taught Hitachi how to build CF Cards in the late 90's because SNDK was too small to take on SmartMedia and create a standard single handedly. In 1997 Hitachi had 26% of the worldwide Flash card market revenue (22% of units sold worldwide). Hitachi is also entering the MMC market and will counter SD with their own version of secure MMC. But I bet the CF Association will not approve the new secure MMC because it will not be compatible with existing MMC cards. It would create a lot of confusion with consumers. Toshiba doesn't make CF cards, but they are the founders of SmartMedia. In 1997 they had 2% of the worldwide flash card revenue and 11% of worldwide units. The have been fighting tooth and nail to establish SmartMedia as the "defacto" standard for flashcards -- and losing. Toshiba's recent partnership with SanDisk is basically a concession showing the superiority of CF cards over SmartMedia. Now I think Toshiba will focus their attention on new applications using secure digital (SD). SmartMedia is basically doing the Betamax (Hopefully Sony's blasted Memory Stick will follow). The market share numbers for 1997 are from IDC's report dated Oct 28, 1998. I have seen the numbers for 1998 market share but I cannot find them right now. But Toshiba and Hitachi are still major players in the worldwide flash card market. Does anybody have any recent information from Semico or IDC showing the 1998 numbers? If anyone has these numbers, can you post them here or email them to me. Essentially, my feeling is that Toshiba and Hitachi have more control over their prices and production than does SNDK because they actually make all the major components. Hitachi even makes their own controllers (SmartMedia has no built-in controller). SNDK has to buy them from out NEC (and in the past Motorola). SNDK is now addressing this vulnerability with their alliances with Toshiba and UMC. I do agree with you that SNDK's ace in the hole is their patents of flash memory emulating a HDD. Q1/00 is the 1st quarter SNDK has made a profit without these royalties."

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