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

To: Art Bechhoefer who wrote (21350)	12/19/2001 3:31:28 PM
From: Sam	Read Replies (1) \| Respond to of 60323

Art, Surely Sandisk can get their portion of whatever cost of the building that they put up. The major cost of the plant was in the equipment, which will be transferred to the plant in Japan (and the cost for this born by Toshiba). I don't buy the view that costs in Japan will necessarily be higher than in VA; aside from the fact that the state of the art equipment will include a high degree of automation, don't forget that Japan is getting crunched right now. As its deflation continues, the yen gets weaker, salaries get lower, getting qualified employees gets easier and cheaper. I don't see Japan's downward spiral ending any time soon, in fact it will probably get worse, perhaps much worse, before it gets better. Toshiba will now focus on flash output; if they didn't believe that they could do this profitably, they would, IMHO, do the same with flash that they did with DRAM, i.e., cut their losses and get out of the business. There may be reasons for Sandisk's stock to go down from 16 or 17, but if this new situation is the reason, I think it is an overreaction. What really matters is, will the output from the plant be low cost output, and will Toshiba honor the spirit of their prior agreement with Sandisk, allowing them to have the same output at at least the same cost as the Dominion plant? My own guess about the answer to these questions is "yes" and "yes". But as usual, we'll have to wait and see. Best wishes, Sam