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

To: slacker711 who wrote (26509)	8/13/2004 3:18:35 PM
From: Pam	Read Replies (1) \| Respond to of 60323

Hi Slacker, Thanks. You provided some nice information in your post. Yes, I forgot the incremental supply from Hynix, STM, IFX and MU as they ramp-up their o/p. But I thought, they were producing the low density chips and gradually moving to 1-2Gb by year-end. Surprisingly, the prices for the low density chips have come down the least. Probably, FV and Samsung have moved on to higher densities and not much pressure on the newer players? As for the GM, I think I made a mistake in my assumption that being vertically aligned means higher GM for Sandisk than a pure chip manufacturer. For the same amount of chip output, the revenues for a company like Sandisk will be much higher than a company like Samsung but it is more likely to have higher dollars in profit albeit at a lower GM rate than Samsung's. Being vertically aligned might help one stay profitable relative to others in an increasingly competitive card market but one will have lower GMs than a pure semicon manufacturer. I guess, the vertically aligned model provides some stability at the expense of higher GM as you have an outlet for your own chip production. It will be hard to get the GM information for FlashVision but would like to know how they compare vs. 67% GM for the Samsung's Flash/SRAM unit. The 45-55% margins that Sandisk was talking about is at card level and not the chip level so it is not directly comparable to Samsung's GM. But I agree with you, in the next 6 months FlashVision will catch-up with Samsung and probably go even below them in terms of manufacturing costs at the chip level as they ramp-up 90nm MLC output. I can't remember where I read it but I was under the impression that Samsung will have their own MLC o/p by year-end. -Pam