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

To: Michael A. Gottesman who wrote (25547)	4/13/2004 9:33:11 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

It looks like SanDisk's investment is increasing beyond earlier plans. But looking at Toshiba's estimates of growth in demand for 2005 suggests that the larger investment is fully justified. The issue down the road is whether the urge to keep up with Samsung means another glut in two or three years. Many investors will be extra cautious because it is hard to believe that almost 80 percent annual growth in demand can last forever, or for even a few more years. Yet, it is well to recall Eli Harari's views that lower prices generate more and more new applications. I believe flash memory is already priced low enough to justify replacing the hard disk drive in notebook computers. The extra cost of flash memory is compensated by less current draw, which means either longer battery life or a smaller battery. In either case, it means a better performing computer. Put another way, a small laptop would need only two compact flash slots to have enough memory for most applications and files. Additional file space could come from external flash or from additional flash cards. Note also that manufacture of wafers is pretty much automated to the point where higher labor costs in Japan (compared with elsewhere in Asia) would not be an impediment. Art

To: Michael A. Gottesman who wrote (25547)	4/13/2004 10:00:32 AM
From: Howard R. Hansen	Respond to of 60323

But the article said "Of the total spending, investment in chip-making equipment, estimated at 230 billion yen, will be shared equally by Toshiba and SanDisk Corp (NasdaqNM:SNDK - News) of the United States." hence SanDisk's share is $1.06 billion. Last year SanDisk's share was estimated to be approximately $900 million. So yes SanDisk's share of the cost has gone up but not by 39%.

To: Michael A. Gottesman who wrote (25547)	4/13/2004 11:17:18 PM
From: Howard R. Hansen	Respond to of 60323

More information on the new fab Toshiba and SanDisk are building. Toshiba Raises Flash Memory Investment To $2.5B Kyoko Hasegawa, 04.13.04, 12:56 PM ET Toshiba said construction has begun on a 300-millimeter wafer fab at its Yokkaichi facility in central Japan, to boost its production of NAND flash memory chips. NAND flash memory chips are used in digital cameras, memory cards, MP3 music players and USB-compatible memory devices. Toshiba said it expects the market for the chips to grow at an annual rate of 30% through 2005, or to $6.4 billion in 2005 from $3.6 billion in 2003. Toshiba said $2.5 billion will be spent to establish the new plant, up from an initially estimated $1.9 billion. Toshiba said it will pay to construct the building, and it and SanDisk, its strategic partner in the NAND flash field, will equally share the cost of equipping the new plant. Toshiba said production at the new facility will start during the second half of the year to March 2006. The plant will have an initial manufacturing capacity of 10,000 wafers a month, expanding eventually to 37,500 wafers, Toshiba said. "The fab still has space to expand capacity, and further investment could take output to as high as 62,500 wafers a month," the company said. During each phase of expansion, the output will be equally shared between Toshiba and SanDisk (nasdaq: SNDK - news - people ), "a provision that will form part of the definitive agreement on the facility that the companies expect to sign in June 2004," Toshiba said. The plant will initially employ 90-nanometer process technology jointly developed by Toshiba and SanDisk, migrating to 70nm process technology in the period April-September 2006, and to 55nm technology in 2007. Copyright 2004 AFX News Limited. All Rights Reserved