WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 173.61

+6.5%

12:23 PM EST

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To: Art Bechhoefer who wrote (11839)	6/7/2000 9:07:00 PM
From: Ausdauer	Read Replies (2) of 60323

The problem is, I can't find any competition that would pose a serious threat either to CF or MMC. I can live with competing formats and products, such as SmartMedia and MemoryStick. Art, we need to pin Eli down on the cost structure of SmartMedia now that FlashVision is a reality. My understanding is that SanDisk's cost will come down significantly now that the JV is a done deal. As you know, SanDisk private labels SmartMedia in order to round out their consumer product line. I think that is an excellent strategy given their channel exposure and the benefits will be felt in the long run with improved brand recognition and the "turnkey" relationship with retailers. With the success of items like the Diamond Rio! and its clones and the Olympus digital camera line the importance of the SmartMedia business cannot be underestimated. This underscores the value of SanDisk's dense network within the retail channels and OEM's. Second, if and when Memory Stick takes off, we will need to look around and see who will be manufacturing the cards for Sony. My understanding is that SanDisk has a new packaging technique for MMC and SDMC that simplifies the manufacturing process. This was mentioned very briefly at the Shareholders' Meeting. [I perceive the actual "card assembly" as being tied very tightly with manufacturing. In this way the flash memory and controller can be mounted directly on a circuit board with the electrical contacts/connectors and then "wrapped" in plastic. Testing would be the only quality control step that would be required.] I would not doubt that it could be applied to products like Memory Stick. The engineering investment, manufacturing expertise and patents in this arena may be largely overlooked by analysts. Also, if Sony hits a home run with Memory Stick they are going to have to buy high density flash memory on the spot market. FlashVision may end up being a supplier to many companies that nobody would anticipate today based on the perceived competition between the various card standards. At some point it would be great to get a virtual tour of MMC/SDMC manufacturing that highlights these assembly techniques. BTW, where is our patent expert that was going to pour over the packaging information??? Ausdauer

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