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

To: Steve Lee who wrote (17871)	1/1/2001 5:23:41 PM
From: Ausdauer	Respond to of 60323

"SanDisk probably enjoys a small, hidden royalty from Viking that is collected from the sale of the flash chip component." Steve, if you look at Limtex' last post... [per SNDK's 10Q] We have entered into patent cross-license agreements with several of our leading competitors including Hitachi, Samsung, Toshiba, Intel, SST, Sharp, SmartDisk and TDK. Some of these cross-licenses are royalty bearing. In 2000 the total value of these cross-licenses is in the vicinity of $70 million dollars pre-tax. To date these appear to be related to raw chip manufacture. Thus, the license is hidden to chip consumers like Viking. In the future '987 licenses should be additive to this sum. Viking would have to pay this directly to SanDisk. Other card assemblers would presumably strike similar agreements. These manufacturers include PNY, Simple, Lexar, Kingston, Pretec, Memorex, Apricorn,... You asked... "What are these hidden royalties and why would Viking or anybody else need to pay them?" I don't know how the FlashVision JV or the production interest at Hitachi's fabs will affect these royalties going forward. This has never been elaborated on publicly, nor has anyone asked Eli point-blank about the arrangements during a c.c. Aus