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

To: Art Bechhoefer who wrote (21282)	12/10/2001 9:28:38 AM
From: Robert Douglas	Read Replies (1) \| Respond to of 60323

A note from Merrill Lynch this morning. _ SanDisk (SNDK, C-3-2-9, $16.58) We believe the reduction in pricing on consumer electronics such as digital cameras and MP3 players will increase demand for flash memory cards. New end markets such as PDAs and handsets should further drive sales of these products over the next few years. We are estimating SanDisk’s revenue to increase 40.1% YoY in 2003. We believe gross margins will increase 22.5% from 11.0% in 2002 to 33.5% in 2003 due to increased utilization rates, lower cost structure and a recovery in pricing during 2003. We expect operating expenses to increase 23.7% YoY and represent 36.8% of sales in 2003, significantly above the historical average of 20%-26% as the company migrates from a fabless to a fab-based model. We are estimating a loss per share of $0.15 for SNDK in 2003 due to the increased cost basis the company should incur due to owning its own fab.