WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 179.68

-1.0%

Dec 29 3:59 PM EST

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To: clix who wrote (28066)	4/27/2005 9:07:01 AM
From: slacker711	Read Replies (2) of 60323

This seemed to imply that the amounts mentioned as going into Fab 3 would somehow be additional to the current cost structure. Can one predict tighter margins as a result? Or is this guy making unwarranted assumptions? In addition to the capex, there is quite a bit of R&D that is going on with the 300mm transition. This R&D will move into COGS once the new fab begins producing commericial wafers (no matter how small the quantity). It will definitely have some impact to both the gross margins and the net margins....but Sandisk managed to absorb $10 million last quarter and still deliver record margins. The third quarter will be the worst since it will have the most expenses and the fewest amount of bits coming out of the new plant. FWIW, these wafer size transitions happen about once a decade. The beginning of the 450mm transition isnt supposed to happen until after 2012. Slacker

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