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

To: Steve 667 who wrote (24850)2/4/2004 1:45:50 PM
From: Road Walker  Read Replies (1) | Respond to of 60323
 
Steve,

re: yes, I am aware of Dell's success strategies, but my point was that an excess supply of DRAM chips did not hurt Dell's profits! So why should an excess supply of flash chips hurt Sandisk's profits? That is the question that no one here or elsewhere has been able to answer.

As more product comes into the market, companies fight for market share. The average selling price goes down faster than the cost to manufacture goes down. Margins on flash chips sink to single digits, but fixed costs including but not limited to fab depreciation remain the same. What don't you understand?

I'm not saying it will happen. If demand growth remains ahead of capacity growth, then everything is cool.

John



To: Steve 667 who wrote (24850)2/4/2004 2:21:02 PM
From: Dave  Respond to of 60323
 
Steve:

The price of DRAM which has pretty much fallen since 1994 does not make up much of Dell's computer costs. There are other components which make up more of the cost such as the uP.

On the other hand, the "predominant" cost of one of the USB devices or SD, CF, xD flash is the flash memory component.

John also repeated what I said.

Re: Your answer

I meant "qualititatively"


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