Flash Memory: SNDK and SSTI
I have to thank Todd Bishop for mentioning SSTI on this thread. It is not the first time I have heard the two mentioned together, but before that I had not taken the time to compare them. Often by analyzing two companies you learn more than by trying to examine just one.
I have a good bit of information on the two that I pulled from their respective filings with the SEC. I went to the filings instead of discussion boards or analysts reports to try to ascertain facts rather than opinions. I will post some of what I found on this thread so that anyone interested can read it and draw their own conclusions. For those who want to "cut to the chase" here are my conclusions:
1. Flash memory (which will be described later) is in a tremendous growth phase. If I wanted to buy a basket of stocks to play this market I might buy both SNDK and SSTI. If, as is the practice on this thread, I wanted to buy the one with the most potential to be a gorilla I would choose SNDK.
2. SNDK appears to have products that are better positioned (in better markets), they have greater market share, they generate more revenues, royalty fees and profits and seem to be growing faster. It would also appear that they have greater patent protection (more on this later)
Note these key lines form the 10k annual reports (note the very different markets, think about where the growth potentials are, keep an eye open for the term "CompactFlash):
SSTI
From 10K 3/30/99
Silicon Storage Technology, Inc. ("SST" or the "Company") was incorporated in California in 1989. The Company is a supplier of flash memory devices, addressing the requirements of high volume applications. Currently, the
Company offers small sector, medium density devices ranging from 512Kbit to
4Mbit that target a broad range of existing and emerging applications in the
personal computer ("PC"), PC peripheral, communications, consumer and industrial
markets. The Company is developing higher density memory products to address
broader markets such as digital cameras, voice recorders, memory cards,
networking systems, digital cellular phones, telecommunications and printer font
storage.
During 1998, substantially all of the Company's product revenues were
derived from sales of the Company's small sector flash memory product lines,
specifically from the Page Write Flash products and the Sector Erase/Byte
Program Flash products. The largest applications of the Company's products are
for PC peripheral applications and PC-BIOS storage by PC motherboard
manufacturers.
The CompactFlash Card product family was introduced during 1998 and
features a series of five cards of differing densities. The Company's CompactFlash Card products leverage the Company's patented ATA controller
technology and flash memory design expertise to offer favorable read/write data
transfer rates to the flash memory, which allows significant speed advantages
for CompactFlash Card users for applications such as digital cameras. Initial
shipments were made to customers during the fourth quarter of 1998.
SNDK
10-K405/A 4/2/99
SanDisk designs, manufactures and markets flash memory data storage
products ...SanDisk has applied its technology to the markets for digital
cameras and other consumer electronics devices such as smart phones, personal
digital assistants ("PDA") and MP3 portable music players. The Company's
customers in 1998 included Arrow Electronics, Inc. ("Arrow"), Canon Inc.
("Canon"), COMPUSA, Inc. ("COMPUSA"), Eastman Kodak Company ("Kodak"), Epson
Hanbai Co., Ltd. ("Epson Hanbai"), Hewlett-Packard Company ("Hewlett-Packard"),
IBM Corporation ("IBM"), Kyocera America, Inc. ("Kyocera"), Matsushita Electric
Industrial Co., Ltd. ("MEI"), Mitsubishi Plastic Co. Ltd. ("Mitsubishi
Plastic"), NEC USA Inc. ("NEC USA"), Norand Corporation ("Norand"), Psion
Computers PLC ("Psion"), Staples Inc. ("Staples") and Telxon Corporation
("Telxon"). The Company currently has patent cross-license agreements with
Hitachi Ltd. ("Hitachi"), Intel Corporation ("Intel"), Samsung Electronics
Company Ltd. ("Samsung"), Sharp Electronics Corporation ("Sharp"), Silicon
Storage Technology, Inc. ("SST") and Toshiba Corporation ("Toshiba").
The Company believes its core
technical competencies are in high-density flash memory process and design...
The Company develops products that it believes will have
applications in large, emerging markets such as the markets for digital cameras,
PDAs, smart phones and MP3 portable music players.
The Company developed the CompactFlash format and was one of the founding members of the
CompactFlash Association ("CFA"), an organization established in October 1995 to
promote CompactFlash as a small form factor flash data storage standard. The
Company believes that this format is becoming the de facto industry standard
storage platform for digital cameras, where it is used instead of traditional
film.
The Company believes that it was the
first to develop and introduce removable flash data storage cards and that it
has led the industry with several technological innovations.
more later
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