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

To: Sam who wrote (25784)	5/7/2004 9:35:15 AM
From: Art Bechhoefer	Respond to of 60323

Though it's been noted many times earlier, it's worth noting again that the new camera phones with moderately high resolution, requiring a fair amount of flash memory, are really adding market demand for SNDK products. The new demand confirms what Harari has been saying in recent months; namely, that camera phones will create a larger market than stand alone digital cameras. It's also worth noting that SNDK shares declined after a stupendous earnings report last January, mainly because a few analysts predicted a glut in manufacturing capacity, lower margins, and a flash memory market that would be like DRAM several years ago, when nobody was able to make money. If those same analysts took an honest look at what has happened since January, they would see that: 1. Demand grew at a rate far in excess of their pessimistic predictions. 2. Manuracturers were unable to supply enough product to keep up with demand. 3. Lower prices were caused mainly by increasing productivity, which led to increasing demand at lower price levels, and increasing profits based on higher unit sales. 4. The best estimates of long term growth foresee demand increasing over the next two to three years, with the highest growth coming from camera phones and new storage applications (like the Cruzer). Digital camera demand might drop a bit, but it would have to drop quite a lot from the 79% increase in shipments from Japan before I would start worrying. 5. One of the best decisions SanDisk made was to build additional manufacturing capacity much earlier than planned in order to accommodate rising demand. While some people may choose to sit on the sidelines or even short the stock (there are always a few crazies around who don't realize that you NEVER short good management), investors who are long in the stock are seeing an increase in book value per share, which, regardless of market price, is still the best way to measure change in shareholder wealth. Art