WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 157.05

-5.4%

3:32 PM EST

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To: Pam who wrote (26508)	8/13/2004 2:12:15 PM
From: slacker711	Read Replies (1) of 60323

Looking at the pace of declines in the spot markets, it seems to me that either Samsung has been dumping the output (the ones that Sandisk is not buying from them, if one remembers Sandisk lowered the non-captive purchase last Q, and also some others who are buying less as they are having a hard time to compete with Sandisk) or the demand is slower relative to increase in supply because of migration to 90nm technology and thus higher output. Any comments? At least some of the price drop is probably due to Hynix. They dramatically ramped production during the 2nd quarter....from 20,000 wafers in March to 35,000 in June. hynix.com Has anyone made comparisons with some other co's as to whether they should have higher GM because of being vertically aligned? I mean, 4Q03 is as good as it gets for Flash memory markets. I just came across this report for Samsung yesterday. I dont know where the analyst got the precise breakdowns for profitability by segment, but he has the Flash/SRAM segment with a 67% gross margin. baby.boom.com.hk They expect margins to drop all the way down to 50% during this quarter. For comparison, I believe that Sandisk gave guidance (during the analyst day) that their captive MLC margins were around 45-55%. I assume that Samsung was getting higher margins during the past quarter because they didnt cut prices as much as Sandisk and they are farther along the 90nm startup curve. I think Sandisk should be able to cut into this cost lead during the next six months with their own 90nm ramp....especially since Samsung wont be moving to MLC until the end of '05 (per their last CC). Slacker

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