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

To: Spheres who wrote (27099)	12/6/2004 10:10:10 PM
From: broozer	Respond to of 60323

Definitely not long term the automakers and the public acctg firms you listed are all private partnerships. I agree there will definitely be consolidation in the flash market, but it will be a nasty, bloody war of attrition similar to the evolution of the DRAM industry. Currently, you have Samsung, Toshiba, Renesas, Infineon, Hynix, Micron, and STMicro all producing or ramping production. Am I missing anyone? Samsung will definitely survive and I would lay good odds on Toshiba surviving which means SNDK will be around. This will be a huge market and hopefully SNDK will survive. I actually like LEXR's business model better in a excess supply environment. They have a much simpler business model, a potentially strong partnership with EK, and NO CAPITAL EXPENDITURE COMMITMENTS. One of the problems with SNDK's business model that not many people realize is that all of the profits are sucked back into the business to expand capacity for additional fabs. So when you put on your hardhat and get a tour of the new fab, take a look around. See all that equipment? Those are your profits. SNDK does not generate FCF, which at the end of the day, is all that matters. The point I am trying to make is that SNDK's business model is very capital intensive and works great when capacity is constrained. However, in a period of excess capacity, product gets dumped in the marketplace which favors resellers like LEXR. Best, Broozer