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

To: David W. Tucker who wrote (12158)	6/22/2000 9:53:00 AM
From: Ausdauer	Respond to of 60323

Tuck, I have written up my take on the SanDisk IP defense in a two-part investment thesis... ...that I linked to in an post early in the day yesterday. I would be pleased to hear about any impressions you may have about the upcoming patent nullification trial. What burden of proof is placed on the plaintiff (Lexar)? Do you have a sense of how defensible the '987 patent may be? I think the beauty of the '987 patent is not only the fact that it is broad and incorporates fundamental technology originated by SNDK, but also that it is only 3 years old. SanDisk bet the farm on the CompactFlash standard and they will be tenacious in defending the disk drive emulation patents and card assembly teachings. On a side note, royalties for 2000 are projected in the range of $12.0 to $12.5 million on a quarterly basis. The fact that the FlashVision JV is finalized and SanDisk will purchase some leading edge NAND flash from Toshiba this year indicates one of two things. One scenario may be that previously negotiated licensing agreements with Toshiba were recognized (on par) for fabrication/lithographic technology and the resultant loss of royalties will be accounted for by increased production by other competitors (Hitachi, Sharp, Intel...). A second scenario is that the JV agreements called for licensing of new technology not included in the original 1997 negotiations (read: MLC/D2 and beyond) in return for the lithographic/production expertise from Toshiba. In this case prior royalty arrangements are still valid or will be phased out gradually after Q4 2000. I think MLC is a big bargaining chip for SNDK and the INVOX acquisition was brilliant. As you may know, one of the head INVOX engineers that is on board at SNDK is heading the division that is striving for the first gigabit flash chip. Exciting times, these. Aus