<<as the recession deepens into 2H and then into next year he is going to have a bit of a problem wit hall this extra capacity coming on stream. You can't eat CF coming out of Virginia and UMC and in a depression its food that counts.>>
The new plant in Virginia makes different kinds of flash memory from that made in Taiwan. Specifically, they are going to be making 512 mb SD cards in Virginia, or at least that's my understanding from the conference call.
However, as you suggest, the higher prices people pay for fuel and electricity (especially in California) may have a dampening effect on consumer buying. I would not call this a depression by any means, nor a recession. The market for many items made by SNDK, moreover, is not limited to the U.S. and is generally confined (at present) to consumers well above the poverty line, or even well above average middle income brackets.
So, I take issue with the notion that there is no basis for better results in the second half of 2001. First of all, the excess inventory will probably be taken care of by that time, and second, there is no reason to believe that worldwide demand is not continuing to grow. Third, and not recognized by most investors, is the fact that after many years, European economies are beginning to grow at rates approaching U.S. growth in recent years. So even if the U.S. experiences a downturn in economic growth, there are areas of the world where economic upturns can compensate.
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