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

To: Ausdauer who wrote (15282)	10/3/2000 9:33:01 AM
From: Road Walker	Read Replies (2) \| Respond to of 60323

Aus, Note the last line in the following PR from the SIA: World Semiconductor August Sales Grew 53 Pct Reuters Oct 3 2000 6:17AM ET SAN JOSE, Calif. (Reuters) - Worldwide sales of semiconductors grew 53 percent to hit record levels during the month of August, driven by strong Asia-Pacific region growth and booming demand for Internet and communications devices. Sales of semiconductors, the tiny circuits that control devices ranging from computers to mobile phones to car brakes, rose to $18.2 billion from the $11.9 billion of August 1999, the Semiconductor Industry Association (SIA) said on Tuesday. The SIA said the sales growth was apparent in all major geographical regions of the world, with chips used in wired, wireless and Internet equipment in heaviest demand. The Asia-Pacific region, which includes manufacturing powerhouses such as Taiwan and Korea, grew 60.2 percent from August a year ago. Japan sales grew 53.7 percent. The Americas rose 50.3 percent and Europe's sales climbed 46.4 percent. Regional growth was up sequentially in each major geographic region, the SIA data showed. August's $18.2 billion in sales compared with the $17.3 billion reported in July. The trade group said the August data puts the industry on track to reach market forecasts for growth above 30 percent for the full year 2000. The SIA's Global Sales Report is a three-month moving average of sales activity. The report is tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represent some 70 major chip producers. The three-month moving average is a mathematical smoothing technique that takes out variations due to companies' monthly financial calendars. From its beginning in the 1950s, the semiconductor industry has been characterized by a four year cycle which has been sporadically modified by unexpected economic factors. Strong growth cycles such as the industry is now experiencing are somewhat offset by cyclical downturns in subsequent years. Sales of microprocessors, the brains of personal computers, have posted moderate single-digit growth in recent months, according to financial analysts. By contrast, flash memory chips, which give electronics such as mobile phones their ``instant-on'' features, have grown well in excess of 100 percent, highlighting the explosive demand for communications equipment over PC-based devices.

To: Ausdauer who wrote (15282)	10/3/2000 9:55:46 AM
From: Road Walker	Read Replies (1) \| Respond to of 60323

Aus, re: "It seems like SanDisk is rubbing shoulders with the big boys." Random thoughts on that. In pure manufacturing prowess, it seems like SanDisk would have a hard time competing with the likes of Hitachi and Toshiba when flash card volumes increase. The IP royalty revenue is more comforting in that it isn't based on gross margins, larger fabs will have economies of scale and lower COGS. Also, when the first down cycle hits in CF, royalties gross margin will not suffer as much as actual product sales gross margins, because royalties don't have the cost basis. It still seems logical to me that SanDisk will be bought out by a larger competitor as CF grows as a category. The company just seems like too small a fish to swim with these sharks. SanDisk really needs to establish a brand presence and preference through marketing, that would be almost as valuable as it's IP if they were to be bought out. SanDisk seems to be cutting good deals with these guys. I sure wish I could see the details, where the Devil resides. John