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

To: Jason Rooks who wrote (20250)	5/4/2001 1:57:36 PM
From: Ausdauer	Read Replies (2) \| Respond to of 60323

Jason, licensing revenues "Aren't those annual licensing revenue numbers similar to SNDK's??? I think SNDK had a bit over $13 million in Q1 of 2001 and is projecting about $10 million for Q2 of 2001, so SNDK is doing better. Also, you don't know how much of the Lexar gets up front with a new licensee versus recurring royalty payments. There may be some front loading this year for Lexar given the agreements are all new. Recall that SNDK's license is fully paid-up. I don't believe there are any ongoing payments for the SmartMedia infringement that SNDK acknowledged. What can be said about the flash card market? It is clear that the flash semiconductor firms are forging alliances with companies who will be moving products at the retail and OEM levels. Hitachi has a number of players who buy their flash and controller combos. Samsung is tapping Lexar on the shoulder in order to get their flash into the Lexar Memory Stick, SmartMedia, CompactFlash and MMC products. Toshiba/SanDisk also have a significant retail presence and seem the most vertically integrated. SanDisk has exited from a purely fabless operation with the FlashVision joint venture. Eli stated that the early production runs have yields which may be unpredictable and the cost of initial production runs has to be amortized into the cost basis for the initial wafers. This is occuring on the backdrop of swollen inventories, falling ASP's and uncertain demand at a time when Americans are being laid off in record numbers. I have some doubts as to whether SanDisk will have a profitable 2001 for these very reasons. Right now card sales depend on the sale of a $300 digital camera sale, a $400 PDA sale, a $1000 digital videocamera sales or a $200 MP3 player sale. The macroeconomic predicament is the wild card here. I am worried about another inventory write-off in Q2. My opinion is that "one-time" events should occur just one time. Sequential inventory write-offs would indicate that SNDK doesn't have any grasp of the demand side of the flash equation. As Art said, it would seem likely that smaller players will fall to the wayside during 2001 and I remain confident that SNDK will weather the storm okay. I am just having trouble getting used to the thought of the decline in EPS this year after a phenomenal 2000. Aus