To: Larry Grzemkowski who wrote (13964 ) 12/15/2000 7:14:28 PM From: LemonHead Read Replies (1) | Respond to Hi Larry, thought this article on flash memory might interest you and others.redherring.com Microsoft sees future with flash memory The goal for Microsoft .Net is to enable all users to synchronize applications and data with Internet appliances, most of which use flash memory.STOCKS LOOK ATTRACTIVE SanDisk (Nasdaq: SNDK) , with 40 percent of the flash-memory market. This company manufactures removable flash cards for digital cameras, audio devices like MP3 players, and digital camcorders. Growth in these markets has already been strong: SanDisk's third-quarter revenue was up 153 percent year-over-year, and it owns more than 100 patents, which it licenses to competitors. The company is also an equal partner with Toshiba in a venture called Flashvision, which, to meet growing demand, plans to transform a Virginia foundry into one capable of generating $1 billion in annual sales by 2002, when it's expected to reach full production. It's slated to begin operation in the second half of 2001. This ramp-up on the supply side, coupled with .Net on the demand side, makes SanDisk a timely value, especially considering that on December 14 its stock was trading at $54.06, 68 percent off its March high of $169.63 . At that price, SanDisk is valued at 35 times 2001 earnings estimates, a reasonable multiple for a company expected to show 21 percent earnings growth in 2001.Silicon Storage Technology (Nasdaq: SSTI) . Its chips are incorporated into set-top boxes, pagers, personal computers, routers, and a wide range of Internet appliances. According to company forecasts, its capacity will not meet demand until the end of 2001. Backlogs have been steadily increasing, and because its products are used in Internet appliances, the .Net effect will hit Silicon Storage strongly in 2002, likely causing the dislocation between demand and supply to continue. Despite this promising growth, Silicon Storage's recent stock price of $13.75 is 65 percent below its June high . The company also is trading at a downright cheap forward price/earnings ratio of 5.5.M-Systems Flash Disk Pioneers (Nasdaq: FLSH) , notable for its DiskOnChip technology, a single-chip replacement for hard disks in Internet appliances. M-Systems uses off-the-shelf flash-memory chips along with its proprietary software to provide full hard-disk emulation. While an early-stage company compared to the other two, this technology still helped M-Systems generate growth of 246 percent year-over-year and 43 percent in sequential revenue in the second quarter.M-Systems's recent stock price of $20.19 is 57 percent off its June high , and while it is the most expensive of the three stocks we discussed, with a P/E ratio of 36, it only has a total market capitalization of just $585 million. The company could well be undervalued given the opportunities in front of it.
