Uncle Frank, You are correct...
...to date SNDK is 100% outsourced, from raw chip production to final assembly.
I think we all will agree that the merits of a fabless manufacturing operation may be outweighed by factors specific to SNDK such as an inordinate concentration of manufacturing in Taiwan and, more generically, the lack of price control due to other flash and non-flash competitors looking for fab capacity to lease.
The decision to depart from a fabless structure may be spurred by several factors such as a) fear of exposing proprietary manufacturing techniques to competitors, b) anticipated growth that cannot be fulfilled by purely fabless arrangements, c) more rapid implementation of new lithographic techniques, die shrinks,... and d) distribution of geographic/geopolitical/geophysical risk.
SanDisk's decision to make a major capital investment in a fab may expose us to some growing pains, but the other choices seem of equal, if not greater, risk.
Finally, as Tekboy has pointed out, until the IP defense is definitively concluded and royalty streams become more clearly defined, SanDisk is obligated to push on with its strategic plan for manufacturing. (At some time in the distant future SanDisk may elect to exit from manufacturing, such as QCOM did with its handset business.) I think that Eli's grand plan has been both to bolster R&D/capital expenditures with royalty revenue while entering the fray with a leading edge flash fab to support the extensive retail & e-tail network they have so painstakingly developed (that are so essential to brand recognition and brand name development).
It's like wearing both a belt AND suspenders.
Ausdauer |
