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To: Artslaw who wrote (21287)	12/10/2001 6:45:14 PM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

Steve, yes, I think they will try to target profitability in the next several quarters. It may be like trying to turn around a cruise ship at this point given the fact that the scale of operations has changed so dramatically after abandoning the fabless model of production. I hope that it won't take two years in reality. I didn't interpret the Merrill Lynch report as bullish either, nor do I have the sense there is any impending change in business. Eli stated Q4 would probably be the nadir for SNDK during the last c.c. I am not sure when margins will return to positive territory given the competitiveness of the market at present. I share the same fear as you do. There just doesn't seem to be a bottom in card pricing. The Merrill Report was confusing in that it mentioned increasing gross margins, while at the same time underscoring the burden of fixed costs for running Dominion. I read somewhere that mass adoption won't occur until card prices are less than $10.00 a piece, or something like that. This is the price point where people don't mind dropping a card off at a film developer or swapping cards with a friend. I guess it is the same price point where Iomega 100MB Zip discs really took off. I do see believe the MP3 market will make a comeback as flash prices continue to fall. It will be interesting to see what happens over the next few months. Eli said that MP3 was pulseless at this point given the lingering security issues. I also think 64 or even 128 MB of flash pales in comparison to a several hundred MB CD-RW diskette or a multiple gigabyte portable hard drive. But we are slowly gaining on them. Aus

To: Artslaw who wrote (21287)	12/12/2001 10:36:02 AM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

Steve, I read the snippet from the Merrill Lynch report a few more times... ...and can't tell if it is a buy or sell recommendation. This rating system is foreign to me as well... SNDK, C-3-2-9 ...and must be some sort of safety/volatility/timing rating. I wonder if the remainder of the report was positive or negative. Looks like another blip up again today. No news that I can see so far. Perhaps Sam's post about consolidation of manufacturing is viewed as positive by the analysts? I never thought of Infineon as a competitor in SNDK's markets and it would appear they continue to specialize in Flash ROM applications. Some of the new, pre-loaded Palm flash cards contain ROM content. I also got an e-mail today and it looks like several competitors are essentially liquidating inventory. Viking is selling 32MB CompactFlash at $9.99 a piece at PC Mall and Kingston is selling a 256MB CompactFlash for a little over $100 a card. Is it possible these companies are exiting the market or scaling back production? Aus