Good point about the "inconsistency" among the financial community
Re: Citigroup upgraded flash-memory
by: mlc178 (M/New York) 12/15/05 10:43 am
Msg: 237268 of 237286
Excerpts from Citigroup SNDK Report Today
Bit supply growth of 258%, 168% and 107% is expected in 2005E, 2006E, and 2007E, respectively as industry evolves from a duopoly to an oligopoly, with Hynix and Intel+Micron emerging as strong secondary suppliers to Samsung and Toshiba/SanDisk. Supply faces challenges in ramping new NAND architectures such as multi level cell (MLC) and in scaling alternative architectures such as NROM or AG-AND. Further, available DRAM capacity for conversion to NAND flash should diminish by the latter half of 2006 given Vista's increased DRAM requirements. Lastly, preferential supply agreements with Apple, M-Systems, SanDisk, and other buyers are concentrating the NAND "channel."
Demand growth of 264%, 168% and 106% should push supply capability. High-density flash-based MP3 players, and removable and embedded memory implementations in handsets will outpace NAND consumption from traditional digital camera and USB drives in 2006 and beyond. Upside demand risks exist in new application growth in PC, video player and enterprise applications, while downside risk could exist from hard drive-based MP3 player cannibalization. We see risks tipped more to demand upside than downside.
New application growth will likely continue to surprise industry observers in breadth and popularity. Media center set-top box and notebook implementations in 2006 and late-2007, respectively, are possible, though neither are yet included in our forecast.
We believe Samsung is tracking on or above plan for its 25% MLC mix this quarter and believe bit growth is on target. Confident that MP3 player densities will move to the 6GB to 8GB level in 2H06E, our conviction in SanDisk's growing MLC-based royalty revenue stream is high. And while bears will point to SanDisk's recent unfavorable STMicro IP ruling, we believe the Street remains too low on both industry bit growth and MLC royalty mix next year for SanDisk.
Posted as a reply to: Msg 237267 by mlc178 |
