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

To: Andre Williamson who wrote (21327)	12/17/2001 9:57:39 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Andre, this development, if true, could have far reaching implications. At the moment, it is only rumored, but to understand better what is happening, one has to look at the overall situation at Toshiba, a company that has been having profit problems for quite some time. Getting rid of part of its assets would make its balance sheet and cash flow look better, but it would also have consequences for SanDisk. For example, the flash memory output from the Manassas facility is supposed to be shared equally by Toshiba and SanDisk. SanDisk has no agreement with Micron. Would SanDisk be left running a facility at 50 percent of capacity? Certainly no profit there. Now that Tosiba has acquired the SNDK flash technology, can it use it freely in its other facility, making flash cards that would compete with those made by SNDK? And one further point--the Manassas facility is really operated by Toshiba, which has the latest manufacturing technology and experience. Whereas SanDisk is primarily a design company with a small retail component. SanDisk doesn't have very much manufacturing expertise, having left that to Toshiba in regard to this plant, or to the facility operator in Taiwan. So we'll just have to wait and see. I'm a little concerned that we've heard nothing from SanDisk at this point. Come to think of it, there has been no corporate news from SanDisk, other than some PR on taking digital photos, for more than three weeks. They won't get a holiday card from me! Art

To: Andre Williamson who wrote (21327)	12/17/2001 3:31:21 PM
From: Ausdauer	Respond to of 60323

Andre, You raise a valid concern here. If Toshiba leaves SanDisk holding the bag at Manassas this would be a significant breach of the trust that SanDisk and Toshiba have worked to create over the last few years. I would find it hard to believe that Toshiba would back out now unless the semiconductor market is really much worse than we think. I will call SanDisk Investor Relations today and see if they are planning on releasing any statments. Worse of all, Craig Freeman may have be right along. Aus

To: Andre Williamson who wrote (21327)	12/17/2001 4:35:28 PM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

Andre, I would suspect that Toshiba, in consolidating its production of DRAM with IFX... ...would consider selling off the portion of Dominion responsible for DRAM production. If, in fact, they shut down NAND production at Dominion it would mean that the production migration to 1 gigabit densities would be scrapped there and moved back to Japan. It would also mean that there is a serious overcapacity that remains in the market and that Toshiba is not projecting an improvement in this situation in the near term. The cost of idling or shutting down a fab is substantial. I have read that the requalification process is tedious. Also, think of all the workers who would be laid off that would subsequently need to be rehired or replaced. This would be a terrible situation to be in. I called SNDK today and Sharon told me that they are examining the material that was posted today. There is no formal statement reply offered by the company now. So, we will need to be patient until a clarification is given. Recall that if there is no substance to the claim that SanDisk may say nothing at all. During the last c.c. there was no mention whatsoever about moving production overseas. That would have been a serious omission if abandonment of Dominion was in the works. Aus