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

To: Ausdauer who wrote (13461)	8/1/2000 3:54:17 AM
From: hueyone	Read Replies (1) \| Respond to of 60323

Ausdauer, Thank you very much for your reply. I am still learning about the explosive growth flash industry and greatly appreciate your commentary. If you look at the engineering talent they have and the R&D expenditures I think you could easily conclude that designing an AT controller is well within their competency. I will certainly take your word on this, but whether this would be an efficient allocation of SNDK's capital compared to purchasing controllers from SSTI or Tower is another question. INTC, the largest flash producer in the business, recently ceded the low density flash component for Intel's own 800 series chips to SSTI with the comment that it would reduce Intel's OEM costs: techweb.com You later wrote SSTI could end up taking a bath on the ultra-high density component that would neutralize any advantage of their low cost (high margin) controller. Likewise, SNDK could end up taking a bath on the low density flash controller component of the module that would neutralize any advantage of their high density NAND component. (g) You asked Has anyone researched whether embedded flash disks with ATA-compatibility utilize SanDisk's IP? Your closing remarks encouraged me to go back and read all the recent press releases. I can see how the imprecise wording of the press releases could raise questions on several issues. So let me describe again what I believe SSTI is doing with regard to the ADC module. SSTI has created a single module design that will integrate SSTI's ATA controllers with NAND high density data storage flash. The SSTI controllers are based on SSTI's patented SuperFlash technology. The high density NAND flash may or may not involve SNDK IP. According to a 7/27/00 CSFB SSTI update I just found at Schwab on PDF format, the NAND flash components will be produced by Samsung, Toshiba, etc. I suppose the etc in that line could refer to SNDK. NAND flash produced by Toshiba could potentially involve SNDK IP as well. This 7/27/00 CSFB report (available at Schwab on PDF) also notes that SSTI will be selling its ATA controllers to sub-assemblers (read Apacer) who SSTI has licensed to manufacture its ADC design. So the sub-assembler will be acquiring controllers from SSTI and the NAND flash from Toshiba, Samsung or any other number of high density NAND flash producers including SNDK. Further on in the 7/27/00 CSFB report the author writes Why do we like SST's approach? SST has chosen to attack this opportunity and expand its addressable market by producing the controller portion of the module and allowing its partners to contract the other necessary components and assemble the devices as well. At this point in time, the company has partnered with Apacer Group, a subsidiary of Acer Company. With this sort of relationship, SST is producing the highest margin portion of what we believe could become a high-volume product. In this capacity, SST is not looking to produce the same sort of high-density NAND Flash chips currently championed by Samsung, Toshiba, SanDisk, etc. It is, however, looking to participate in what could become an explosive market, in what we view as a fairly low-risk, niche capacity. You also quoted a July 17 press release which stated The ADC product uses the same proprietary ATA controller technology as SST'S highly acclaimed CompactFlash card products. The description of SSTI's flash cards in the company web site says its CompactFlash cards leverage the company's patented ATA controller technology and flash memory design expertise to offer unprecedented read/write data transfer rates to the flash memory. I am certain this description is referring to SSTI's own patented technology and not to someone else's. ssti.com The company web site also has a description and picture of the new ADC modules as well as the official July 10 ADC press release. Finally, I am interested in any information you have regarding crosslicensing between SSTI and SNDK. Is SNDK or SSTI actually receiving payments from one another and do you have any idea how much? You referenced SSTI licensing SNDK technology for its flash card assortment. Thanks for raising these questions Aus and thanks for getting me interested in the flash memory indsutry. Best regards, Huey