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

To: clix who wrote (27745)	3/25/2005 5:02:38 PM
From: pompsander	Read Replies (1) \| Respond to of 60323

One observation from your notes on the Lexar CC: If Sandisk/Toshiba produce 30% of the NAND and set a price point, let's say, 15% below what LEXAR is going to charge its clients....how long do you think it will take before those clients sign agreements with SNDK to accept SNDK product just as soon as production/volume/yield improvements allow SNDK to meet their needs? Those clients will not stay with LEXAR a moment longer than necessary, nor would they ever return to a company like that unless forced to....sheesh. It is one thing to have higher production costs than a competitor...but to broadcast that you will force customers to pay that price to protect your margins, thus hurting theirs....why would they be loyal?

To: clix who wrote (27745)	3/25/2005 5:19:39 PM
From: clix	Respond to of 60323

Correction: (.02) - (.04) eps for Q1 excluding legal expenses.

To: clix who wrote (27745)	3/25/2005 7:26:21 PM
From: Sam	Read Replies (1) \| Respond to of 60323

They repeatedly said: We will no longer try to match the price cuts of Sandisk / Toshiba. Sure. Walmart will be jumping for joy hearing that.

To: clix who wrote (27745)	3/26/2005 11:55:42 AM
From: slacker711	Read Replies (1) \| Respond to of 60323

A couple of more observations from the Lexar call....as usual, this isnt comprehensive just the comments that were of interest to me. phx.corporate-ir.net - An analyst asked about a potential injuction against Flashvision. The answer never mentioned Flashvision (or narrowed it to just Toshiba). The case will go before the judge (not the jury) on April 13th. Most of the trade secrets related to flash memory (not controllers). This was around the 1 hour 16 minute mark if anybody wants to listen and get their own take. - Going forward, they are going to make their price decisions based on profit over growth. They repeatedly emphasized the fact that Sandisk/Toshiba cant supply the entire market. - Flash demand in late Q4 and Q1 have been much stronger than they anticipated. This was drive by gaming and MP3 players. There isnt enough flash supply to go around right now. - They expect Q1 retail pricing to be "relatively stable"....some products will go up and some will go down. They believe that they got ahead of the industry in Q4 on high capacity pricing (prices were too low) and are trying to get back in-line. - They expect Samsung 4Gb MLC 90nm (not 8Gb!!!) in the next few months as well as 4Gb SLC 70nm. - They expect Samsung to launch a new fab before the end of Q3. I think that this is the previosly planned fab 14 but I will have to hunt this down. My big fear right now is that Samsung will take a large amount of DRAM production and shift it to NAND. - Micron and Hynix will be launching new chips in Q2 and Q3. They hope that this will impact pricing in the same way as when the companies released 512Mb and 1Gb chips (down 50% in a few months). - They have no idea how long the appeals process will take. Their legal team is still in court. - Kodak branded sales were up 120% QoQ. They are now in 1/3 of Lexar's storefronts. - License and Royalty was $1.2 million in the quarter...unchanged QoQ but down from $4.6 million in the prior year. They only expect $.5 million in the the 1st quarter (that seems so low that I'm not even sure that I heard it right). - Nothing has changed with their suppliers. They are "caught up" with paying them. - Move from build to order forcast with a buffer rather than a build to forecast. JMO, but this seems like a recipe for dramatic undersupply. - They are launching their own built Memory Stick Pro this quarter....it will have a dramatically lower cost structure. Slacker