JRI - thanks for your post. This is an awfully quiet thread and it would be nice to get some discussion going. I do not mean this post to be a comparison of SSTI versus SNDK. I have looked at both and choose SSTI over SNDK, but that does not mean investors will not make money in SNDK. So far the SSTI stock price increase has been the clear winner, but who knows what next week will bring? Here is a quick comparison:
Jun-99 Sep-99 Dec-99 Mar-00
SNDK Revenue 52.5 67.5 82.7 109.4
Sequential Growth 19% 29% 22% 32%
YoY Growth 68% 111% 63% 148%
SSTI Revenue 23.0 35.1 48.3 62.3
Sequential Growth 25% 53% 38% 29%
YoY Growth 37% 94% 167% 240%
Also:
biz.yahoo.com
biz.yahoo.com
Here is my weekly DD on the current position of SSTI in the flash market:
On the technical side, have a quick look: it looks like a great time to enter or increase your position:
clearstation.com
We are trending higher(MACD, MACD Histogram) and have recently experienced a cross-over.
Here are two posts here on SI that are a must read:
Message 13946732
Points in my focus:
1....SSTI and SNDK are currently targeting different market segments and there is not a lot of overlap.
SSTI is the only pure flash memory play - focusing on code storage. SNDK and M Systems, two other pure flash plays, focus entirely on the data storage market.
However, ultimately SSTI hopes to leverage its flash code storage business into high density data storage solutions. This has major implications for short vs. long term investors.
However one of the reasons I choose to invest in SSTI over SNDK is something people forget when comparing the two: currently applications for flash code storage devices far outnumber applications for flash data storage devices, as supported by the 3/30/00 CSFB report.
2.Consensus analysts expectations are for STTI to maintain a better than 100% YOY EPS growth rate this calendar year as well as coming calendar year 2001.
biz.yahoo.com
NOTE: In 1999 SSTI recorded a loss, so the 100% YOY EPS is a little misleading. However, at a recent price of $99, SST is selling at 30 times next year's projected earnings of $3.51 per share.
3. SSTI's margins are rising to 41.5%, an 11.2% increase over the previous quarter.,
And a decent discussion here at SI on SNDK:
Message 13947557
Although I feel this piece isn't entirely accurate, it does present another valuable perspective:
SSTI primarily makes embedded flash memory chips. These things go into devices such as cell phones, PDAs, switches, routers, and set-top boxes. They're also occasionally used as BIOS chips for computers (the memory independent of the hard drive which a computer uses to start up). SSTI's claim to fame here is there SuperFlash technology, which allows them to make cheaper chips on a cost/MB basis when compared to competitors such as Intel and AMD. However, the density of their chips is nowhere as high as that of its rivals. While Intel's already capable of making 16 MB chips, and AMD's rolling out with 8 MB designs, SSTI's stuck at the 2 MB level right now. As more advanced, data-intensive applications begin running on handheld devices, the largest market for embedded flash chips, this lack of scalability will put SSTI at a major disadvantage.
Sandisk, meanwhile, is the undisputed leader in the CompactFlash memory card market. These chips, primarily used in digital cameras, audio recorders, and MP3 players, are slightly larger than embedded flash chips, and are capable of handling much more data. Sandisk's high-end CompactFlash chip can hold 192 MB worth of information, and I believe that a 256 MB chip is on its way. Eventually, as cell phones and PDAs start handling MP3s, streaming video, 3D games, advanced operating systems, and God knows what else, and as people begin demanding an easy way of transferring all this data from one phone to another so that one phone can handle all the apps previously on another phone (Bluetooth isn't enough for this), I think CompactFlash cards will start replacing embedded chips in these devices, even if they are slightly larger in size. Aside from having by far the highest density chips in this market, Sandisk also has some IP that it licenses to its competitors for a royalty.
Silicon Storage does make CompactFlash cards, and Sandisk does make embedded chips, but neither company's particularly strong in these niches.
In my opinion, Silicon Storage might be good for the short-term due to the huge capacity constraints currently hitting flash memory manufacturers, but could be in trouble as Intel and AMD start ramping production and put to rest these problems. Sandisk, meanwhile, doesn't look like it's going to lose its market-leading status any time soon. If CompactFlash cards end up replacing embedded chips in cell phones, then this company's going to reap a huge bonanza. If they don't, then Sandisk is going to see a couple more years of manic growth followed by an eventual slowdown and the inevitable multiple contractions that always follow such slowdowns.
Hope this helps,
Eric |
