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

To: Tae Spam Kim who wrote (14282)	8/25/2000 9:07:43 AM
From: Ausdauer	Respond to of 60323

Tae, I think that the piece you posted here is very well written and distilled down to the essential facts. There are several corrections that I would make. First, the Fuji camera you purchased uses Toshiba SmartMedia. SanDisk simply relabels Toshiba's product. If you look back at prior earnings reports the sales of SmartMedia aren't mentioned for this very reason. SanDisk sells SmartMedia in order to offer a turnkey solution to retailers. I think it would be fair territory to call the CFO and inquire whether profitability from SmartMedia sales will be influenced from the FlashVision JV. Second, I would eliminate TDK and SSTI from the licensee list and start a second list for CompactFlash assembly licensees that includes these two companies. Additional licensees in this area is key over the next six months. Third, I would try to give a PE ratio based on projected 2000 and 2001 earnings, not just the prior 4 quarters. Fourth, for disrupted megamarkets I would list 35mm film first, CD/music distribution second, and 8mm video film last. Fifth, add Palm, HandSpring (MP3 player), Ericsson and Compaq to the industry partner list. Sixth, SEG shares were closer to 10 million. Aus

To: Tae Spam Kim who wrote (14282)	8/25/2000 9:18:44 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Tae Kim, here are a couple of points you may wish to consider for your evaluation of SNDK: 1. SNDK is the largest supplier of REMOVABLE, HIGH DENSITY flash memory (but is now also moving into embedded memory through its association with Tower Semiconductor). The words in caps are critical to an understanding of the market for the type of flash memory SNDK makes. 2. Although SNDK has until recently been "fab-less," its partial ownership of facilities in Taiwan, through its initial investment in UMC, gives SNDK some priority in terms of allocation of production to meet SNDK needs. This is a better situation than being simply at the mercy of the fabricator. 3. In regard to competition, the Sony MemoryStick (as indicated in an earlier conference call with Harari) probably uses SNDK patents and will become another source of royalty payments. Any evaluation of SNDK is not complete without discussion of the patent infringement suit against Lexar, which among other things, supplies components to Sony for the MemoryStick. It is very likely that SanDisk will prevail in this lawsuit and will end up receiving considerably more royalty payments than at present. Art