WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 270.16

+7.9%

3:59 PM EST

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To: Steve 667 who wrote (24850)	2/4/2004 1:45:50 PM
From: Road Walker	Read Replies (1) of 60323

Steve, re: yes, I am aware of Dell's success strategies, but my point was that an excess supply of DRAM chips did not hurt Dell's profits! So why should an excess supply of flash chips hurt Sandisk's profits? That is the question that no one here or elsewhere has been able to answer. As more product comes into the market, companies fight for market share. The average selling price goes down faster than the cost to manufacture goes down. Margins on flash chips sink to single digits, but fixed costs including but not limited to fab depreciation remain the same. What don't you understand? I'm not saying it will happen. If demand growth remains ahead of capacity growth, then everything is cool. John

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