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

To: Michael A. Gottesman who wrote (10990)	5/12/2000 9:55:00 AM
From: Ausdauer	Respond to of 60323

Mike, I wish to make more detailed remarks in my synopsis to follow later tonite. I will say that Eli mentioned the completion of the conversion to 256 Mbit/D2 will occur this current quarter. The third UMC fab is being added in Q3 of 2000. There is also a non-UMC fab coming on line in Q3 of 2000. The die shrink from 0.28 to 0.24 microns is also anticipated in Q3. (Could someone please calculate an anticipated increase in production capacity on this basis alone?) Also, there is NAND flash coming on line from the JV. I presume this is coming out of Japan from Toshiba's Yokkaichi (sp.) fab. The cost structure of this NAND flash is superior to the current arrangements with Toshiba whereby SmartMedia is purchased and private labelled by SanDisk. That is to say, the JV will allow SanDisk to profit from SmartMedia which to date represents the biggest competitor to CF and MMC (read: Olympus and Fuji cameras, Diamond Rio!, etc...). I think the sum total of these events will likely equate to an improvement in gross margins. I don't recall Dr. Harari making a specific comment on this, but there was a slide showing a gradual, but steady improvement in gross margins. More Later! Please be patient, I am trying to catch up on office work today so I can post tonite without any work left until Monday. Ausdauer