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

To: alanrs who wrote (24841)	2/4/2004 8:35:31 AM
From: Steve 667	Read Replies (2) \| Respond to of 60323

ARS and John, So the next question is why on earth (or mars) would it matter to Sandisk's revenues or profits if there is an abundance next year of flash memory chips? If anything it would make Sandisk's non-captive supply less expensive, thus improving margins. Furthermore, flash chip manufactures such as Samsung are not going flood the market with flash chips and drive the price down and cut their own throats. Eli has tried to make this point several times, but his accent is sometimes hard to understand. And suppose for the sake of argument the chip makers were so desperate that they sold their chips at cost, Sandisk's competitors cost would be still be no lower than Sandisks. Eli said also that Samsung has a very small market share of the flash card market and that is not likely to change much. Sandisk has established retail outlets, Samsung does not. Margins have not changed (32-36) in the last 6 quarters. The CFO said in the conference call yesterday that no new entrants to the market will impact SNDK profits at all this year. And even more furthermore, every stock analyst in the world knows that the 4th quarter is always better than the first quarter due to retail seasonality. Always has, always will. It is not something they suddenly became aware of on 21 January, 2004. And even furtherestmore Sandisk has about 30 plus separate flash card products. Most of these products come in multiple megabyte capacities and are constantly changing as higher capacity, Morose law etc. So how on earth could Sandisk really accurately estimate net or gross margins when each product is different, and each product has multiple size capacities and the margin on each of those is different. Give me a break! With all these products and capacities, constantly changing, just how good do you think the margin of error for margins can possibly be? The tail is wagging the dog. Regards, Steve