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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (9496)	3/6/2000 11:42:00 PM
From: Craig Freeman	Read Replies (1) \| Respond to of 60323

Jay, re: "shouldn't SNDK be immune to an overcapacity situation among flash makers?" Not a chance. The instant supply exceeds demand, the price of raw flash memory will crash through the floor. At that point, anyone could build an unlimited amount of CF (or whatever) and flood the market. Since SNDK makes a lot more money selling hard product than from licensing fees, it could hit SNDK hard unless they their heads. The first trick is to build up a "KODAK-like" brand name between now and then (branding creates margins as high as 10x those of commodity producers.) The second trick is to make sure that no one else can build a competing brand (Fuji/Lexar.) If you compare SNDK/Sony/Lexar with INTC/AMD/CYRX a few years back, you'll have a pretty good idea of how things might play out :-) Craig