Evening Aus, happy 40th.. may I take the opportunity to respond to your reply? :) It's like a game of tennis.. haha..
<<SSTI will need to promote the standard, garner design-ins, support the product once released,... Thus, it is a commitment on their part. I don't see this as the easiest way to sell flash-based controllers, even if they are high margin. In fact, to say that SSTI will only be selling the fat margin controller seems to be a bit of an oversimplification.>>
I would assume that this is one of the basic concepts of business, eh? Have idea, do research, create product, market product? :) Nothing is business is easy really (outside of criticizing it, of coz!), and of course all business processes require commitment.. But in fact, when you comment in regards to it's "oversimplication", it's reality.. there's not the concern or complexities in this case to manufacture or find second source NAND.. that is the job of companies such as Apacer, which I think you ask about below.. more on that later. :D I certainly didn't imply though that SSTI has no role in the marketing of the product!
I will add the most important piece of info, however. I had the chance to listen in on a CE Unterberg Lunch Conference starring Bing Yeh and Jeff Garon however, and I was able to ask about the ADC product myself. His excitement was clearly concealed, but he ultimately shared that he expects *1 million units / month* to be shipped by 2nd quarter 2001.
The problem that some people have with companies such as SSTI is that, if they don't brag about their successes, well gosh.. they just must be hiding something.. or.. they must not be performing well! I've followed this company for a while though, and spoken with the leadership myself. They get angry, in fact when I ask them as to why there's a paucity of press releases, etc. This company insists on allowing the fundamentals to speak for themselves. Not to be the least bit prejudice, but I've dealt with orientals in business situations in the past, and it's their style to be conservative in their discussions.. they're not ones for showing their deck. Dunno about you, but I respect that to an extent.. because when they speak, it's almost as if they shout, and the veracity of the comments is never questioned.
I will say this though.. 1 billion in predicted revenues in 2001 compared to 125 million just 24 months ago is a big discrepancy! That money has to be coming from somewhere! :D
<<Why did SSTI take an equity stake in Apacer?
Are they bullish on Apacer's prospects,
or is Apacer going to use the investment in order to hold
SSTI's feet to the fire once ADC is launched and up & running?
Are Apacer and SSTI trying to share the risk of the ADC launch?>>
Perhaps I should quote:
ssti.com
"Under this accord, SST will license its ADC design, based on SST’s proprietary SuperFlash ATA controller and firmware, to Apacer. Apacer agrees to use SST’s ATA controller and firmware exclusively to manufacture and sell ADC products. Both SST and Apacer plan to have volume shipments of its initial ADC products by August 2000.
"We believe that this second-source partnership with Apacer will help satisfy the projected demand by the industry for our ADC design," said Bing Yeh, president and CEO of SST. "We expect that demand for the ADC product will grow even more as the digital electronics and Internet Appliance markets continue to require smaller and more cost-effective embedded mass data storage solutions. The superior manufacturing efficiency and product distribution logistics provided by Apacer will undoubtedly help meet the market appetite for this product line."
-and-
biz.yahoo.com
"``Apacer is able to sufficiently provide its clients series of ATA Disk Chip (ADC) through vertical integration in semiconductor technologies with its up-stream international IC manufacturers and world-class IA supplies,'' said Austin Chen, President of Apacer Technology Inc. ``Apacer's ADC, which is produced exclusively for the consumer electronics industry, allows us to provide, our partners, with highly compatible and quality products.''
Regarding this particular alliance, Chen commented, ``SST is a global renowned company in designing and manufacturing Flash IC for high volume applications in the digital consumer, networking, wireless communication and Internet computing markets.'' While, Apacer has established itself in the memory module market, Apacer aims to be among the top three largest third-party memory modules companies in the world by the end of the year 2000. ``The alliance between Apacer and SST sets out to not only improve the Flash technology and increase production, but will most certainly help Apacer to achieve this goal in advance.''"
----
So, from what you've read here.. and from what I've been told at least, the nature of the collaboration is to "scratch each other's back".. SSTI gets a guaranteed manufacturer, which they of course need b/c they are fabless and a line of products to place the product within.. and Apacer gets the revenue and intellectual property to advance an aspect of their IA division, which they needed anyways.. Your question about feet to the fire.. shrug.. I don't know if I'd read into it like that.. but the product already IS on the way.. it's already being created and shipped. Clearly it's ramping if the CEO is making a public prediction that they'll be selling a million units a month in a couple quarters.. shrug.
<<I actually believe that SSTI has no interest in chasing SanDisk, Toshiba, Hitachi, Intel or Samsung into the upper echelons of storage flash.>>
Oh lord.. another one of these "if it's bigger, it must be better" people. :D You certainly can't deny the fact that approximately 80% of all flash that's sold is low density in nature? :) I still don't understand how people who invest in SNDK automatically see SSTI as flawed b/c they participate in the same "sector".. why not see them as.. complementary? SNDK and SSTI pose no threat to each other.. they both have a market they compete in rather well, and one would be well suited to invest in both.. SSTI is one of the most misunderstood companies I've ever seen! All this discussion of flash excess, oversupply.. is a whole other topic I'd love to talk about sometime, but suffice it to say.. it's so inappropriate to class SSTI in the same class as SNDK, etc.. I'd be concerned if SSTI merely sold naked NOR, but they have 50 products now, will have 80 by years end, and have focused their market on niche products so much that up to 50% of their product revenue next year will be on embedded technologies, which as you can imagine is quite safe from this commodity talk.
<<Regarding SSTI CompactFlash, my only disappointment is the fact that SSTI has deliberately (IMHO) tried to hide the fact that outsourced high-density flash is the core to this removable mass storage product and the ADC product line. This has created the belief that SuperFlash is scaled to production quantities of storage flash for SSTI's CF product. Even SSTI investors who appear to know their book of business often get this wrong (present company excluded, Paul).>>
See my previous discussion above re: deliberate deception.. just b/c the company doesn't publicly discuss their mass storage product doesn't mean they're trying to hide their outsourcing of the NAND.. :D I don't see all of the other legions of CF producers discussing the fact that they're paying royalties to SNDK, etc.. why would they need to? :D Any of the technical papers I've read have made it pretty clear.. shrug. Do I think investors in "opposing" companies have jumped to conclusions without doing the full DD? Heck yeah.. happens all the time! Look at Johnathan Joseph! :D Just b/c they might invest in SSTI (even though that decision is a sound one and points towards some level of smarts ;)), doesn't make them incapable of misunderstandings...
I hope this response finds you well Aus, and is not taken in the wrong spirit.. all the best.
PS: I'm not knowing how you italicized / boldfaced / made pretty colors on here.. could you perhaps point me towards how I could learn about doing so? thanks!
docpaul |
