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

To: Ausdauer who wrote (15579)	10/14/2000 1:01:34 AM
From: ralessipvh	Read Replies (2) \| Respond to of 60323

Aus, I know before you have said you are not really concerned w/ threat from M-Flash, but ties w/ Samsung , Hitachi, Toshiba and Saifun cause some concern --do they not?? I pulled the most recent Smith Barney report on FLSH and Saifun. I'd be interested in you thoughts on this. M-Systems Flash Disk Pioneers Ltd. (FLSH)# FLSH: A First Look at Saifun; Why M-Systems Invested 1H (Buy, High Risk) $10 Million Mkt Cap: $774.1 mil. October 11, 2000 $10 MILLION STRATEGIC INVESTMENT IN SAIFUN ANNOUNCED M-Systems Flash Disk Pioneers (FLSH) announced on October 10, 2000, a strategic investment with Saifun Semiconductor, a fabless semiconductor company and leading developer of non-volatile memory for the flash memory market. Under the agreement, FLSH will invest $10 million in Saifun's current round of financing in exchange for cooperation in the development and eventual use of Saifun's patented NROM technology. ABOUT SAIFUN AND NROM TECHNOLOGY Saifun Semiconductors is an Israeli fabless semiconductor company that is currently developing its own proprietary technology, NROM. Saifun's founder and CEO, Dr. Boaz Eitan, is a recognized developer of flash memory and other types of non-volatile memory. He also sits on the Board of Directors at M-Systems. Saifun has already signed licensing and partnership agreements with other system suppliers to begin to market its products. Saifun's NROM technology offers various advantages over other types of non-volatile memory (NVM) technologies, including current NAND or NOR-type flash. The NROM fabrication process requires less than half the silicon required by other processes, thus reducing space and improving speed. *In addition, NAND technology requires a 27-step process in fab production, where initial production has shown NROM can be completed in fewer steps. The bottom line is that NROM storage components are cheaper and easier to produce, resulting in significant cost savings for customers. NROM will also be able to offer more features and functionality relative to other NVM technologies, which have been a bottleneck for applications involving various types of consumer electronic devices including cell phones, smart cards and digital cameras. SAIFUN AGREEMENT SHOULD YIELD BENEFITS FOR M-SYSTEMS *FLSH's current NAND-type memory device, the DiskOnChip, is one of the premier embedded storage devices. It combines RAM and ROM functionality (allowing in-system reprogramming and erasability with the non-volatility of ROM).* With the development of NROM, FLSH will be able to enhance its current product offering. We believe FLSH will use this strategic agreement with Saifun to develop enhancements for its DiskOnChip product line. The new features that can be offered with NROM technology will not only broaden the end markets FLSH will sell to, but should also improve its gross margin. **FLSH continues to have a strong relationship with its current NAND suppliers, Toshiba and Samsung. The development agreement with Saifun is still in the early stages and we don't anticipate that any products with NROM technology will begin to be offered by FLSH until late 2002. In the meantime, FLSH will aggressively market its NAND products to customers, as well as offer product enhancements that will penetrate other end markets and expand its customer base. We believe FLSH is focusing its development efforts in the area of consumer electronics, including cell phones, PDAs and digital cameras, with new product announcements coming soon. FLSH WILL REPORT 3Q-2000 ON OCTOBER 23; REITERATE 1H RATING AND $60 PRICE TARGET We expect FLSH to report its 3Q-2000 on October 23, 2000, before the market open. We estimate that FLSH will have revenue of $24.5 million with EPS of $0.12. We expect FLSH will exceed this estimate. We reiterate our 1H rating and $60 price target. We believe FLSH is the leader in embedded flash data storage solutions. The agreement with Saifun will further strengthen the position FLSH currently has as a leader in the market, as well as improve the products offered. We expect FLSH to broaden its product offering to include other end markets, particularly in electronic devices and cell phones. This ultimately should lead to management's goal of $1 billion in sales. Thoughts on how they will compete w/ SNDK ?? thanks Rick