WDC/Sandisk Corporation Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : WDC/Sandisk Corporation

WDC 176.37

-5.8%

3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Sam who wrote (21024)	10/23/2001 12:18:34 AM
From: Ausdauer	Read Replies (1) of 60323

Sam, I think your analysis of Lexar's last Q is accurate. They have whittled down inventory, but they are buying flash on a consignment basis and will need to spend cash to build the inventory back up. If they have $6 million in inventory and want to sell $20+ million in flash cards over the holiday quarter they are going to have to pay someone for raw materials. To this end they opened a $10 million credit line, of which they have already drawn down $2 million dollars. Going forward, I think SanDisk and a few other CF manufacturers will offer professionals a second source for premium grade CompactFlash cards. This is Lexar's only true niche at the consumer level. The Lexar shareholder's value has decreased substantially as the proceeds from the IPO dwindle. They have lawsuits against 5 competitors which will be a cash drag it they go to trial. They also sold infringing technology to Viking and didn't sign a licensing/supply agreement for the "non-infringing" controler with Viking until July or August of 2001, suggesting that Viking had been selling infringing technology unabated for some time. All SanDisk will need to do is produce some Viking cards with the offending Lexar controller inside and refer to the settlement from a year ago. I think that will really hurt. I also got the distinct feeling that Sony is starting to snuggle up to SanDisk. Despite its relationship to Toshiba and Matsushita, SanDisk has the potential to win over Sony's faith. It will be much easier for Sony to try to negotiate a flash memory agreement with SanDisk than with a Japanese or Korean competitor. Lexar has stated in the c.c. that they believe all NAND-based flash cards, irrespective of form factor, "run into" Lexar's IP in some fashion. They did not elaborate. I guess that means they are going to sue Toshiba as well. Well, I hope they have deep pockets. The deferred revenue may be pre-paid license fees or card sales which cannot be booked until product is sold to end-users. I consider increasing deferred revenues as a positive, actually. Best, Aus

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next