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Technology Stocks : WDC/Sandisk Corporation
WDC 156.38-0.5%10:31 AM EST
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To: slacker711 who wrote (26191)6/23/2004 5:38:42 PM
From: Pam  Read Replies (1) of 60323
 
Slacker,

The only way they can shrink the die is to move to 70nm technology. If Samsung is ready to mass produce at 70nm by year end, Sandisk's costs would be close to Samsung's as long as Samsung is producing SBC chips and Sandisk MLC chips. If Samsung is able to make a transition to 70nm as well as from SBC to MLC they will be ahead of Sandisk provided Sandisk stays where they are right now (which means taking a nap). I doubt, if Sandisk will be sitting on its butts and singing songs of their past achievements! They are running, and intend to stay ahead. The only problem is the demand. Is the demand growing faster than the progress Sandisk and Samsung are making via manufacturing efficiencies??? That's the million dollar question. We need lots of bit growth and we need it now. Sandisk stock is not going to make a new high until there is a shortage of NAND supply on the horizon (either perceived or real).

Royalties are good to have, but I would rather prefer Sandisk to be the lowest cost producer (and also collect the royalties). This will do two things- drive the inefficient players out of business and deter new entrants by producing at cutting-edge technology making it almost impossible for new entrants to outlay capital and take chances.

-Pam
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