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

To: Danny Chan who wrote (10722)	5/1/2000 9:49:00 PM
From: Ausdauer	Respond to of 60323

Danny, Thanks for your interest in SanDisk. You asked the following... 1. What exactly is SNDK's IP? (the interface, the product design or manufacturing process?) I believe the IP encompasses both general features of flash cell architecture such as allocation and addressing of sectors, random access, block erasing, detection of cell fatigue, wear leveling,...and the like and assembly of the a specific product, the CompactFlash card. I refer to the former these as "pre-CF" patents as the current royalty stream appears to be derived from major competitors who license this type of technology. The CompactFlash patents teach the core competencies required to manufacture this specific card. The ATA interface and hard disk emulation are key components, but not the sole competencies. For the most part this facet of SanDisk's IP, something referred to as the "CompactFlash assembly" patents, is being developed currently. However legal battle lines have been drawn and these have not been realized to their fullest potential. We have discussed this matter here extensively. Remember that the domain of these potential licensing and royalty streams is quite large and will be likely based on a per unit payment. The potential windfall to SanDisk is almost unfathomable. Accordingly, I have described SanDisk's business plan as being three-pronged... Message 13371770 2. What is relationship between SNDK and flash memory chip makers (such as Atmel and others)? Does SNDK package their flash chips or make their own? SanDisk designs their own chips and then has them "custom made" by a contracted fab like UMC. The beauty of the fabless arrangements is that they are less capital intensive. Thus, smaller companies are able to control their own manufacturing without owning the fab outright. Also, some fabs have libraries of IC design blueprints and can offer advice in IC design based on this database, whether proprietary or non-proprietary. 3. I know that FLSH is a competitors. how do you compare it with SNDK and other ones like SSFDC (smartmedia)? What about the recent developments that Intel and Micron entry into the flash market? What prevents the logic flash makers enter data flash if they see a sizeable market? I think you are mixing apples and grapefruit here. FLSH, a company, competes inasmuch as high density embedded memory could pose a threat to removable storage. I am not particularly concerned with the possibility at present. Derek has also given a very lucid summary of FLSH's position. They may eventually be a customer of the Toshiba/SanDisk JV. The relationship is, therefore, more complex than on first glance. Message 13528421 Recall that SSFDC is a product. This is the Toshiba's consumer version of removable storage called SmartMedia. Floppy disks and SmartMedia cards have been SanDisk's biggest competitors to date. Regardless of what you may read in the lay press, Sony's (the Mavica line) and Toshiba's popularity (read: Olympus, Fuji, Diamond Rio!) have blunted CompactFlash sales significantly. I generally do not have the same affinity toward SmartMedia as I do to CompactFlash. It is relatively flimsy. It is not forward or reverse compatible within a given device. It is not cross-platform compatible. Also, the thickness of SmartMedia has been a problem with regard to the ability to increase capacity, despite Toshiba's superior lithographic skills. This is analogous to the SanDisk's current problem with MMC (note: SDMC was intentionally designed to be thicker than MMC). The synergy of the Toshiba/SanDisk JV will be something to behold. A summary of the various removable solutions is available at this link... Message 10020997 I hope I have addressed your questions, Danny. Please recall I have no expertise in semiconductor manufacture or design, so some of the comments made here may be inaccurate. Ausdauer SanDisk...minting the digital currency for the Digital Millennium.