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

To: azluke who wrote (13244)	7/22/2000 4:20:08 PM
From: Ausdauer	Read Replies (4) \| Respond to of 60323

AZ Luke, "I also own Intel, what is the interesting news? Relatively new to SNDK, who are SNDK's true competitors? The Intel news I posted earlier was intended to emphasize general market trends in flash memory that others here have also recognized... Message 14085283 My remarks about the flash memory build out at Intel were to underscore the possibility that more licensing fees could be coming SanDisk's way... Message 14067256 Message 14085484 ...however, due to the confidential nature of these agreements this is only conjecture. Recall also that Samsung is having a fantastic year... Message 14052794 To answer your question, I believe Hitachi, Samsung and Toshiba are SanDisk's biggest competitors. The FlashVision JV and investments in Tower Semi indicate SanDisk & Toshiba are more partners now than adversaries. ___________________________________________________________________________ Because of Intel's size I believe you always have to look over your shoulder (and lock the dumpster outside of corporate headquarters). Although Intel sold its flash card business to Centennial you can never completely rule Intel out. The story I wished to relay about Intel has to do with Rambus. I have been interested (peripherally) in the Rambus story for some time because I have heard others draw parallels between Rambus and SanDisk. I have also been drawn in to this discussion until I read an article this week in Laptop Magazine entitled "Going Rambust". "While most Intel processors are coupled with Intel chipsets, other firms also manufacture Intel chipsets for Intel CPUs. VIA Technologies, for example, produces a chipset for the Pentium III called the Apollo Pro 133A. This is an important product because it uses industry-standard Synchronous Dynamic Random Access Memory (SDRAM) instead of proprietary RDRAM. Why is it important that VIA's offering uses SDRAM? The answer is simple: price. While a 128 MB SDRAM module, called a Dual Inline Memory Module, or DIMM, carries an average selling price of about $150, a 128 MB RDRAM module, called a Rambus Inline Memory Module, or RIMM, costs over $400. PC vendors, already facing slim margins amid brutal price competition, have been less than thrilled at the prospect of increasing their system prices to incorporate a technology whose benefits consumers don't yet understand. So we know that RDRAM costs more than SDRAM, but do its benefits justify the added cost? On the surface, RDRAM appears to be a much faster technology. The fastest RDRAM type, PC400, runs at the equivalent of 800 MHz, while SDRAM currently tops out at just 133 MHz. However, SDRAM performs functions in 64-bit increments, while RDRAM is limited to 16-bit data transfers. This limitation, plus RDRAM's higher latnecy often makes RDRAM technology inferior to SDRAM, despite DRAM's 300% price premium. Rambus investors never seemed to consider the technology's actual merits when they bought Rambus stock. If RDRAM costs so much more than SDRAM and doesn't perform as well, you might wonder why Intel is supporting it so strongly. In January of 1997, according to SEC file number 000-22339, Rambus "granted a warrant to Intel Corporation for the purchase of 1,000,000 shares of Rambus at an exercise price of $10 per share." If Morgan Stanley Dean Witter's $500 price target on Rambus were reached, Intel could buy $500 million worth of stock for just $10 million, considerable incentive for Intel to positioni RDRAM as the next PC memory standard." For Rambus, RDRAM competes with SDRAM and it would appear that the argument for a price or performance advantage just doesn't work yet. For SanDisk, CF, MMC and SDMC compete with emulsion film, cassette tapes, CD's, floppy disks, hard disk drives, video tapes, Zip discs... Although not a cost-effective solution in all of these target markets currently, SanDisk's products are highly disruptive in multiple megamarkets because of the unique attributes of flash memory. I believe the argument for Rambus as it relates to the consumer desktop PC market is weak based on the information presented above. SanDisk seems to be much better positioned for growth in targeted consumer markets because of its disruptive power and its central role in the Post PC Era where portability, low power consumption and data collection/storage are paramount. The relationship between Rambus and Intel seems shady. Ausdauer