WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 153.96

+0.7%

3:59 PM EST

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To: slacker711 who wrote (27795)	3/30/2005 9:50:06 AM
From: Art Bechhoefer	Read Replies (3) of 60323

Slacker and Pam: "I think we are set up for a tight NAND market until the end of the year." This will be especially true if SanDisk takes the lead and either lowers NAND prices or keeps them from going up. SanDisk appears to be following a policy similar to that used by Intel for expanding the demand for microprocessors in the 1990's. Intel kept pushing down the price of older chips, making it difficult for its competitors to generate sufficient cash to pour into new research. Meanwhile, Intel brought higher performing chips to market (at premium prices), always staying at least a few months ahead of its competitors. It should be noted that as a manufacturer gets more experience producing certain chips and wafers, its production efficiency goes up. Thus, even if NAND prices dropped, we could still expect profit margins to hold up for Toshiba/SanDisk. Meanwhile, the highly elastic demand for NAND will continue to increase if chip prices remain stable or fall. Fallout from the Lexar litigation should be negligible for SanDisk. Why? If there were some liability for SanDisk, the company would have to report that in an official filing and news release. So why do SNDK shares fail to reflect optimism for 2005? Tech stocks in general, and semiconductor stocks in particular are currently not popular with institutional investors. Art

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