Andre, this development, if true, could have far reaching implications. At the moment, it is only rumored, but to understand better what is happening, one has to look at the overall situation at Toshiba, a company that has been having profit problems for quite some time. Getting rid of part of its assets would make its balance sheet and cash flow look better, but it would also have consequences for SanDisk.
For example, the flash memory output from the Manassas facility is supposed to be shared equally by Toshiba and SanDisk. SanDisk has no agreement with Micron. Would SanDisk be left running a facility at 50 percent of capacity? Certainly no profit there.
Now that Tosiba has acquired the SNDK flash technology, can it use it freely in its other facility, making flash cards that would compete with those made by SNDK? And one further point--the Manassas facility is really operated by Toshiba, which has the latest manufacturing technology and experience. Whereas SanDisk is primarily a design company with a small retail component. SanDisk doesn't have very much manufacturing expertise, having left that to Toshiba in regard to this plant, or to the facility operator in Taiwan.
So we'll just have to wait and see. I'm a little concerned that we've heard nothing from SanDisk at this point. Come to think of it, there has been no corporate news from SanDisk, other than some PR on taking digital photos, for more than three weeks. They won't get a holiday card from me!
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