Hi Aus, That article is great news for both Sandisk and SSTI. This price elasticity is exactly what Eli Harari has been preaching. Do you think Bing's projection of one billion revenues for year 2001 was a rehash of the Q3 CC or a current reiteration. If it is a current reiteration of the one billion revenue projection, that is geat news!
Now, regarding Bing's other statement: Our strategy is to be a broad-based supplier of products from very low density to very high density. OK, yes Bing wants everything, but SST will have their hands full the next few years just working on the code storage market. In year 2000, the code storage market represented about 75% of the flash market, or about eight billion dollars. If SST is looking at one billion in revenues for year 2001, and the code storage market expands by, say 40% to 11 billion dollars, then SST still has plenty of market share to work on without focusing on the high density data storage market. So I would call Bing's statement a long term corporate objective at best.
The other interpretation is this: I believe one can reasonably call 8 megabit and below--- low density code storage, 32 megabit--- medium density code storage, and 64 megabit--- high density code storage. I have heard Bing himself use similar designations in the past, and therin lies a common source of confusion. (Of course this is in contrast to high density data storage at 265? megabit.) I don't know whether Bing in his statement above was referring to this interpretation or whether he was referring to high density data storage such as the market where Sandisk resides.
Let's look at where the SST market is now: For the year 2000 just completed, I am fairly certain that the vast majority of SST's revenues were derived from sales of eight megabit code storage and below. For year 2001, as SST moves down to smaller process geometries, 0.25u 0.18u and 0.13u for example, I believe SST may be able to scale Superflash with the self aligned cell structure all the way up to 64 megabit for code storage by the end of year. That could reasonably be called a move in to high densities. Nevertheless, I still believe that 16 megabit and below will represent the majority of SST's market this year because this market alone could conceivably consume the majority of SST's wafer supply. In addition, SST will have far more process geometries available at 0.25u than at 0.18u or 0.13u, and at 0.25u, SST Superflash cost structure is far more competitive at 16 megabit and below than it is at 16 megabit and above. (Comments MicroE?)
Something to keep in mind is that SST's strategic objectives are to:
1. Dominate the code storage market
2. Become the supplier of choice for embedded flash.
3. Penetrate the mass storage market
4. Become the Wireless Memory Solution Provider
But the company should list those objectives in a different order. SST has been pushing hard on number one and two. And this year they will try to move in to wireless in a big way, objective number four. Meanwhile, I think the only thing they have going for objective number three is the ATA microcontroller. As of of November, there were already in excess of 100 customers lined up for products that used the ATA microcontroller, but I expect the revenues from this item are going to be small for quite some time relative to the revenues from SSTI's bread and butter Superflash code storage. You and I have discussed this ATA microcontroller before (thank God). The ATA microcontroller leverages Superflash in to high density products (or mass storage market) with the following strategy: An assembler, such as Apacer, purchases high density Nand flash from Toshiba or Samsung and integrates this Nand flash with SST's microcontroller in to products for others to sell. Correct me if I am wrong, Aus.
Now with regard to where those cute little pictures of the SST Compact Flash cards fit into all this , I am still in the dark. I will still keep my bet on Sandisk for my CF play. <ggg>
IMHO, the bottom line is that SST will still primarily target low density code storage in year 2001 while moving up the average bit size up a notch or two. There is nothing wrong with this. In fact, this is the game plan---for Superflash to take over higher and higher densities of the market, bit by bit. It is a huge market and hopefully SST will be able to double revenues and earnings again.
(Hey, by the way Aus, didn't you used to always take the other side of this argument with me in the old days and now we are reversed? <ggg>)
Best, Huey
Disclaimer: I could be all wrong. |
