WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 173.53

+6.5%

2:16 PM EST

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To: Steve 667 who wrote (11962)	6/13/2000 9:13:00 PM
From: Ausdauer	Read Replies (3) of 60323

I am not an engineer, either. I am a physician, not a physicist. Steve, your confusion about target markets is not at all unusual. I am not sure who has the responsibility of educating the investing public, but a certain amount of uncertainty and misinformation is passed around by analysts in the industry as well. SSTI must be purchasing flash for their CompactFlash cards from another supplier. The highest density flash chip they make (according to the last conference call) is 16Mbit. SanDisk's biggest competition is Samsung and Hitachi. I think Hitachi is, by far, the bigger threat of the two. I would include Toshiba as a competitor as well were it not for the FlashVision JV. I don't see AMD and Intel as significant threats, but I am constantly looking over my shoulder. Intel has effectively exited from the flash card business and their MLC is still a few generations behind SanDisk. The FlashVision JV is very ambitious and will likely set the pace for the competition. I believe SanDisk and Toshiba have a lot of resources and "tricks" that they have not unveiled yet. Execution is the biggest risk for this venture. I don't visualize competition or pricing as an immediate risk given the scarcity of flash currently and the general build-out of fab plants for all uses Worldwide. This will limit the expansion of flash fabs somewhat. To continue with the SSTI comparison, you will also realize that SSTI has little in the way of retail exposure. I believe some of their products are relabelled as Kingston brand. SanDisk's work in establishing effective retail channels will eventually pay off with better brand recognition and additional means to move product in addition to OEM demand and E-tailers supplied by the likes of TechData and Ingram Micro. The retail channel is of great value which I believe is underappreciated. Also, the recently announced embedded applications for CF along with the industrial applications for type II flash disks (telecom) should help to even out any seasonality in sales. Finally, SSTI is paying for the card assembly/controller license for CompactFlash. Thus they pay a double royalty to SanDisk as the flash chips they purchase are undoubted from Hitachi or Samsung, both of which are SanDisk licensees. I think you see the incredible worth of the SanDisk IP once you realize this. All the Best to SanDisk Longs! Ausdauer

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