SIMO is a supplier to enterprise storage, and riding the same secular trend as WDC/SNDK - that is the growth in storage needs, and transition from HDD to solid state devices.
Growth in storage is pretty well offset by declines in prices.
The transition from HDD to SSD includes a decline in HDD, which has a strong negative affect WDC and STX.
So with SIMO you get the benefit of growth in storage WITHOUT a decline in prices, and the benefit of growth in SSDs caused by the transition from HDD to SSD WITHOUT a decline in HDD revenues. In other words, you get the good stuff and not the bad stuff.
Sure, this is the SNDK board, but when there is a relative pure play which benefits from the secular trends you're discussing it's hard to understand why you're so interested in the stocks which suffer from these same secular trends. WDC is not a 10 bagger in 10 years (or whatever you wrote) no way no how, but SIMO could be.
For years there were loads of people on SI in the memory boards talking about how the memory industry was entering a new period of low competition and higher profits, and what do you know, it was 100% incorrect. Samsung is once again filling the market with cheap memory, everyone is losing money, and the memory companies are waiting for demand to catch up to over supply. The SAME THING that has happened for the past 20-30 years. Everyone here writing about how SNDK (or MU, or whoever) has the new special sauce that is technologically better than Samsung et al, has always been wrong and probably always will be wrong. Only now the one suffering that pain will be WDC (your 10 bagger in 10 years) rather than SNDK.
Why waste your time going through that pain when you've got SIMO with uber high organic growth rates and none of the pain of price competition or HDD revenue decline that will hurt the disk drive and NAND maker stocks? You get ALL the benefits, and none of the suffering. |
