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Technology Stocks : WDC/Sandisk Corporation
WDC 140.22-8.9%3:59 PM EST
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To: Artslaw who wrote (21334)12/18/2001 10:30:39 AM
From: Art Bechhoefer  Read Replies (1) of 60323
 
There are many unanswered questions:

1. Since the joint venture between Toshiba and SanDisk originally contemplated a new plant, does this development mean that the original estimates for flash memory production were way too high?

2. Why wouldn't it have been better and cheaper to refurbish the Toshiba plant in Japan, instead of spending a lot of money to initiate production in a new plant?

3. Given that Toshiba has a lot of excess plant capacity and has been experiencing low or no profit margins in DRAMs, and had an incentive to get rid of excess capacity, did SanDisk have any choice in the matter? Probably not.

4. Why wouldn't it have been better to continue to use the fabrication facilities in Taiwan, instead of going with Toshiba in Japan, which has higher production costs than Taiwan?

Art
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