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

To: Art Bechhoefer who wrote (12568)	7/5/2000 7:27:33 PM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

Art, my 2¢ on the Tower Conference Call I) The call was most important for Tower Semi. Eli spoke very quickly, IMHO, so as not to take the spotlight off of Tower. The Toshiba/SNDK link is important for this growing specialty fab. Eli was very courteous by yielding the floor and consciously not monopolizing the c.c. II) Thanks for calling in and listening. I heard you ask a question of Eli and it was very relevant to us. SanDisk will invest (if conditions are met) a dollar sum slightly greater than the total USIC investment and will issue no new stock, nor need to sell off any UMC stock to fund the venture. [Even if SanDisk were to liquidate UMC shares it would not jeopardize its production quota at UMC.] Eli stated strongly that the Tower fab will be used for leading edge controller manufacturing. He does not see SanDisk's interest in Tower in any way threatening to the people at UMC (see III below). III) The Tower fab 2 will not produce stand-alone flash memory for data storage. The Toshiba/Tower JV will not product stand alone flash for data storage. IV) Eli has an interest in Saifun's technology, Microflash, which is currently licensed to Tower. The proprietary flash cell they produce has less endurance than NOR [and has limitations for this reason], but it is highly scalable. It offers unique programmability characteristics to microcontrollers. Microflash apparently replaces "masked ROM" in embedded applications and can be incorporated using standard CMOS techniques. Thus, "Microflash" competes with "Superflash", the proprietary SSTI technology for embedded applications, and with "Superfly", a 1970's Afro-American super-detective with lots of funk. With Toshiba's experience in cutting edge lithography the embedded Microflash logic should theoretically be scalable to 0.18u lithographic dimensions. V) The Israeli government will fund the Tower project with grants in the range of USD $300-350 million. Finalization of this funding is but one pre-requisite to SanDisk's investment. The location is important to SanDisk because the microcontroller technology for MMC and SDMC is currently being developed at SanDisk's Israel Design Center. I personally see the engineering talent native to this region of Israel as capable of creating the Silicon Valley equivalent for flash memory. I hope this brings foreign investors from Israel to SanDisk's doorstep. VI) SanDisk utilizes 1 million controllers per month. VII) SanDisk can effectively double their investment in Tower on the same or similar terms if things develop favorably. VIII) SanDisk is going global. Customers are demanding it. The growth opportunities for SanDisk have fortunately been outside of Taiwan and are giving SNDK a broad-based, international footing. Respectfully, Ausdauer

To: Art Bechhoefer who wrote (12568)	7/5/2000 7:43:02 PM
From: incomep	Respond to of 60323

(this one has turned into a cash cow) Net cash provided by operating activities is only $167K (that is right, only $167,000) The AR went up significantly compared with AP. Therefore, the earning is not in high quality. ip

To: Art Bechhoefer who wrote (12568)	7/6/2000 8:21:22 AM
From: Greg h2o	Read Replies (2) \| Respond to of 60323

yes, art, i did catch eli's comments regarding not using stock for the purchase. but, i don't think i'd use that comment to forecast whether or not we're at a peak in the semi cycle. as a matter of fact, if anything, it would be bearish. at the top of cycles, companies usually ARE flush with cash. not saying that's the case in this situation. i think it needs to be monitored. if there are further (or any, as some might contend) signs of weakening demand, SNDK will get repriced on the downside. i have my 1/2 position and am patiently waiting for the other 1/2 in the mid 40's. if it runs into the 70's again, i'll likely sell unless this market shows signs of more than short-term rallies....