WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 158.03

+5.2%

9:30 AM EST

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david1951

To: BeenRetired who wrote (60293)	5/20/2016 12:58:21 PM
From: Art Bechhoefer	1 Recommendation of 60323

Did demand AND unit price drop, or just unit price? Also, it's been clear for several years that even when unit price drops, improved technology helps maintain margins. Digitimes also tends to be somewhat inaccurate on its data, so it's not clear to me that, whatever changes occurred recently in demand have led to lower net profits. At least for SanDisk, which can produce TLC chips at lower cost (in dollars) than its competitors, this may not be such a bad thing. Furthermore, SanDisk always has had a policy of meeting some of its demand from wafers produced elsewhere (mainly by Samsung). If demand drops momentarily, SanDisk simply buys fewer wafers from these suppliers and thereby retains relatively high margins. WDC knew what it was doing when it offered a premium price for the low cost producer. Art

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