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

To: Jim Greif who wrote (11444)	5/30/2000 11:09:00 AM
From: Binx Bolling	Read Replies (2) \| Respond to of 60323

FLASH STORM WARNING HERE May 30, 2000 -------------------------------------------------------------------------------- ELI HARARI, Chief Executive Officer, SanDisk Corp., Sunnyvale, Calif. Flash-memory technology has made rapid progress in the past decade. Flash-memory cards are currently shipping with 256-Mbit flash chips. By the time 256-Mbit DRAM moves into volume production, flash cards will be shipping with 1-Gbit flash chips. In the next five to seven years, the cost of flash storage will come down by a factor of 10: a flash card selling today for $200 will sell for less than $20. Consumer-electronics markets respond ferociously to such dramatic price declines. As a result, flash storage, with its low power and small form factor, will become a highly disruptive force to today's consumer audio/video markets, which have relied exclusively on rotating/magnetic and magneto-optical storage devices. We are already seeing the first changes in digital cameras, where flash cards are replacing 35-mm film. Next will come music (e.g MP-3 players) where flash cards will displace cassette tape, CD and MD. In two to three years it will be video, where flash cards will displace 8-mm tape, VHS and DVD. These changes represent tornado-sized opportunities and challenges to flash users and suppliers alike. Specifically: - Where will all the flash silicon come from to support this projected demand? Today's imbalance between demand and available supply will likely get worse before it gets better. New applications will add demand faster than new supply comes on line. Flash at the leading edge requires exceedingly tight manufacturing tolerances and is difficult to test properly to assure high reliability. To meet the challenge, DRAM capacity will be converted to flash, as is already happening at Toshiba Corp. and Hitachi Ltd. Flash manufacturing alliances will flourish, such as the Advanced Micro Devices Inc.-Fujitsu Ltd. and Toshiba-SanDisk manufacturing joint ventures. New dedicated flash fabs will be "commissioned" by large flash OEM users working with the leading flash suppliers. Flash supply from foundries alone will not be able to meet the flash requirements of the smaller fabless companies, who will have to develop special relationships to get their flash. - How will suppliers meet the extreme cost challenge while also generating good returns to investors to justify funding new investments in capacity and R&D? The cost of flash storage will come down in three ways: a) geometric scaling, on the order of Moore's Law, from 0.25 micron today to 0.10 micron in 2005; b) logical scaling, such as multilevel cell technology where each physical cell stores two bits of data today and perhaps four or even eight bits per cell in the next decade, and c) economy of scale, going from tens of millions of cards per year today to billions of cards annually in five to seven years. - Infrastructure creation to support the radically new e-business models. The turmoil over MP-3 music is a good example of the need to meet both the legitimate concerns of content providers and the demands of the consumer.To create user-transparent security, you need secure servers, secure players and secure cards, which do not yet exist in the consumer electronics space. Consumers also shouldn't be asked to support several flash-card standards. Recently SanDisk joined forces with Matsushita Electric Industrial Co. and Toshiba to develop and promote an open card standard for secure content-the Secure Digital (SD) card. The SD Association is an open industry-wide body of users, suppliers and content providers, which already numbers close to 100 of the world's largest technology corporations. eetimes.com Copyright c 2000 CMP Media Inc. By ELI HARARI, Chief Executive Officer, SanDisk Corp., Sunnyvale, Calif.