WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 163.00

-0.4%

Nov 7 9:30 AM EST

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To: IndependentValue who wrote (60048)	4/4/2016 2:28:58 AM
From: Elroy	Read Replies (1) of 60323

Sandisk's corporate gross margins were about 40%, so it's hard to see how WDC owning SNDK would allow them to increase their SSD margins from 20% to 55%. Doesn't add up. And raw NAND gross margins are below device gross margins. So the benefit WDC would get by owning SNDK would be to capture the SNDK raw NAND gross margin, which is below the SNDK corporate gross margin. My understanding is that SSD pricing competition is cut throat tough, I doubt the SSD device gross margin gets above 30% for someone who participates in the general market (ie, not the uber high end, those guys may get nice margins, the rest are going to be down in the dumps in terms of profits as they fight for market share). The way to invest in the SSD revolution is SIMO, baby! SIMO's SSD controller gross margins are above the company average gross margin (which is about 50%). Each of those SSD devices needs a controller. Did I mention SIMO closed at an all time high last Wednesday? Ok, back to your regularly scheduled programming.....

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