Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: ralessipvh who wrote (14097)	8/22/2000 3:11:21 AM
From: hueyone	Respond to of 60323

Off topic: SSTI royalty growth That is a very good report on SSTI and it sounded like the author did a nice job taking notes. But I can practically hear Ausdauer gnashing his teeth from here over the comments about royalty growth contained in the report, so I am going to try to comment on it quickly and then hopefully let sleeping dogs lie. (gg). Aus has pointed out several times that SST's license revenue has declined on a YOY comparative basis and the conclusion has followed in many of our minds that perhaps SSTI's license/royalty program is not going so well. But last week I was able to speak with Mr Garon, CFO of SST, by telephone about this very issue. Briefly, here was Mr. Garon's explanation: Companies wishing to use SST's technology pay a significant one time license flat fee at the time of signing of the agreement. Then they pay royalties per piece as the SST technology is implemented. Revenue from both these sources is rolled in to the "technology licensing" category on the income statements. In 1999, SST made a number of agreements recognizing one time license revenue for use of its technology. The per piece royalties from these agreements are only now starting to kick in a significant manner and are growing steadily. Had royalties been separated from the one-time license fees in the income statements, you would have seen a very nice growth chart for royalties. Even so, the technology license fee category doubled from Q1 to Q2. Look for continued increases in in the technology licensing category going forward due to ramping royalties. Mr. Garon also pointed out that SST will continue to do a great deal of profitable business where license or royalty fees do not accrue to SST. In fact one of SST's biggest opportunities involves making SuperFlash Firmware Hub products for Intel chipsets. In this case, Intel licenses SST to produce the firmware and SST is the licensee rather than the licensor. Yet this is a giant step forward for SST in its mission to make SuperFlash technology the dominant technology in low density flash. So again, there are many ways for this company to capitalize on its IP, and simply isolating license fee growth is not the only way to gauge the success thereof. Best to all Sandisk longs and I enjoyed that very bullish report on Sandisk from the Smart Money website that StockHawk posted today. It looks like Sandisk is starting to attract well deserved attention and is moving up! Regards, Huey