I have just read Sandisk's 1997 Annual Report, and I have jotted down some notes. It should be useful information to people who are new to Sandisk, like myself.
Sandisk IPRs in FLASH covers R&D, semiconductor processing, testing, and packaging. All together, it has over 70 FLASH related patents in the US. It both makes its own FLASH and cross licenses its IPRs with other semiconductor giants such as Intel and Samsung. The company estimates that revenue from licensing will be between 7.5 to 8.0 millions per quarter in the next four quarters.
Sandisk's business can be classified into two segments, industrial and consumer. An example of industrial would be the FLASH that's used for cellular phone base station.
At the end of last fiscal year, Seagate owned 24% of SNDK stocks. Seagate has the right to market Sandisk products beginning on Jan. 1, 1999, under the condition that it still maintains a minimum of 10% of Sandisk. Alan Shugart, the ex-CEO of Seagate held (maybe still holding) a Sandisk board director seat.
Sandisk's FLASH design seems very advanced to me. (Personal opinion, I don't know much about FLASH.) As it is demonstrated in the following paragraph, which I cut and pasted from the the SEC report.
"The Company's patented intelligent controller coupled with the intelligent controller's advanced defect management system permits the Company's products to achieve a high level of reliability and longevity. This defect management system, which currently resides on a single proprietary controller chip, is able to detect bit "wearout," a common problem with flash memory, both immediately following manufacture and late in the product's life. Late bit
failure can occur several years into the life of a product and can be difficult to detect with traditional flash technology. The Company's defect management system automatically detects bits that have failed or are likely to fail due to the number of erase/write cycles such bits have undergone and switches memory to spare good bits incorporated into the design. The system also allows the
automatic substitution of entire sectors or major blocks of the memory chip. Additionally, the controller generates an error correcting code which is stored simultaneously with the data and is used to detect and correct any errors when the data is read. This design permits the Company's products to maintain error-free operation for hundreds of thousands of erase/write cycles and reduces
manufacturing costs by allowing the Company to incorporate partial die with less than 100% of the physical bits on each chip into the products without loss of functionality. Currently, all of the Company's controller chips are manufactured by Motorola using a Motorola CPU core processor."
Sandisk seems to know more than just R&D. It believes that standardization in the FLASH business can grow FLASH from being used in niche products to full acceptance in mass markets. For example, the company pushed hard at developing and marketing the CompactFLASH standard. Because of CompactFLASH's acceptance by both FLASH manufactures and camera manufactures, the company claims that CompactFLASH has became the de facto standard in digital camera.
Following are background informations on its top officers:
Name Age Position
Dr. Eli Harari 52 President, Chief Executive Officer and Director
Cindy Burgdorf 50 Chief Financial Officer, Senior Vice President, Finance and Administration and Secretary
Leon Malmed 60 Senior Vice President, Marketing and Sales
Daniel Auclair 51 Senior Vice President, Business Development and Intellectual Property
Marianne Jackson 42 Vice President, Human Resources
Dr. Harari, the founder of the Company, has served as President and Chief Executive Officer and as a director of the Company since June 1988. Dr. Harari founded Wafer Scale Integration, a privately held semiconductor company, in 1983 and was its President and Chief Executive Officer from 1983 to 1986, and Chairman and Chief Technical Officer from 1986 to 1988. From 1973 to 1983, Dr. Harari held various management positions with Honeywell Inc., Intel and Hughes Aircraft Microelectronics. Dr. Harari holds a Ph.D. degree in Solid State Sciences from Princeton University.
Ms. Burgdorf joined the Company as Chief Financial Officer, Vice President, Finance and Secretary in June 1994 and has served as Senior Vice President, Finance and Administration since July 1995. From 1992 to 1994, Ms. Burgdorf was Vice President of Operations Administration and Vice President of Materials and Planning at Maxtor Corp. ("Maxtor"). From 1978 to 1992, Ms. Burgdorf held various financial management positions including Corporate Controller, group Controller of the Components Group and director of the worldwide customer satisfaction program at Intel. Ms. Burgdorf is a Certified Public Accountant and holds a B.S. degree in Business Administration from San Jose State University.
Mr. Malmed joined the Company as Vice President, Worldwide Marketing and Sales in December 1992 and has served as Senior Vice President, Marketing and Sales since July 1995. From 1991 to 1992, Mr. Malmed was Executive Vice President of Marketing/Sales at SyQuest Technology, Inc., a manufacturer of removable-cartridge disk drives. From 1990 to 1991, Mr. Malmed was Senior Vice President, Sales and Marketing at Prairetek, Inc., a manufacturer of disk drives. From 1983 to 1990, Mr. Malmed held various management positions at Maxtor. Mr. Malmed holds a B.S. degree in Mechanical Engineering from the University of Paris.
Mr. Auclair has served as Vice President, Systems Engineering from 1990 to June 1993, Vice President, Engineering and Technology from June 1993 to July 1995, Senior Vice President, Operations and technology July 1995 to January 1998 and has served as Senior Vice President Business Development and Intellectual Property since January 1998. From 1988 to 1990, Mr. Auclair was Vice President of Engineering at Anamartic, a company that utilizes wafer scale technology to build DRAM mass storage systems. From 1984 to 1988, Mr. Auclair was Vice President and General Manager of the OMTI division of Scientific Micro Systems, a supplier of disk controllers and disk controller chips to the disk drive industry. Mr. Auclair holds a B.S. degree in Engineering Physics from the
University of Maine and an M.S. degree in Computer Science from the University of Santa Clara.
Ms. Jackson has served as Vice President of Human Resources since April 1995. From September 1994 to March 1995, Ms. Jackson was President of M.F. Jackson and Associates, a consulting firm that provided human resource and organizational development consulting services. From 1993 to 1994, Ms. Jackson served as Vice President of Worldwide Human Resources at Logitech, Inc., a leading manufacturer of computer accessories and software products. Prior to 1993, Ms. Jackson was Director of Human Resources at Silicon Graphics, Inc. and Sun Microsystems, Inc. Ms. Jackson holds B.A. degrees in Psychology and Sociology from the University of California at Santa Barbara. |
