Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: limtex who wrote (21359)	12/20/2001 9:05:06 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Limtex--I'm still trying unsuccessfully to get some answers from Frank C. In the meantime, it seems to me that one reason for the Toshiba--Micron deal had nothing to do with the prospects for FlashVision in the Virginia plant. Instead, it had a lot to do with persuasion (i.e., pressure) from the Japanese government to invigorate the recession bound Japanese economy by bringing more manufacturing back to Japan. Who knows, maybe the Japanese government is actually assuming the cost of the transfer of the manufacturing equipment from Virginia to Japan. In fact, the Virginia plant was set up to be the most efficient facility in the world--one that could hold its own with anything that could compete from Korea or Taiwan. As chip manufacturing becomes more and more automated, labor costs become less important. Manufacturing flash cards in the U.S. has an advantage in that finished product is closer to the consumers, at least at the retail end. Manufacturing may also have an advantage in Japan, being closer to most of the camera, MP3, and other OEM customers. But the cards supplied to OEM customers tend to be the lowest cost, low capacity models, not the higher profit margin types sold at retail. In short, I see no valid ECONOMIC reason for this transfer, but I do see some politics at work. As for the sudden need to raise cash, there is nothing that I can see from the most recent 10K filing that suggests any great need for extra cash. At the time of that filing, SanDisk had the best equity to debt position of any company involved in removable flash memory. So far SanDisk has not explained satisfactorily its sudden need for additional cash infusion. If I hear anything, I'll let you know. Art