WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 168.90

+4.9%

Dec 5 3:59 PM EST

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To: Ausdauer who wrote (21338)	12/18/2001 4:42:48 PM
From: Art Bechhoefer	of 60323

Transferring production from Virginia to Japan means more costs that were not previously anticipated and possibly the write down of SanDisk's portion of its VA joint venture. That is, another "one-time" expense digging into the bottom line. One other way of looking at this development is that SanDisk was willing to share its technology in return for partial ownership in a fabrication facility. Now SanDisk has in effect allowed Toshiba to use its technology, but SanDisk can show nothing to compensate. SanDisk, it would appear, was much better off dealing with the Taiwanese facilities. This development also must be seen in the light of the rapid development of flash memory facilities by Samsung, a Korean company with a reputation for offering the lowest prices on whatever it produces. Will Samsung, with the low wage scale in Korea (plus low wages in China, where it is building more facilities) end up the low cost producer of flash chips? That outcome is probably closer than one would like to believe. Art

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