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

To: Cary Salsberg who wrote (27978)	4/22/2005 11:11:38 AM
From: slacker711	Read Replies (3) \| Respond to of 60323

The price declines keep it "tight". Good management in acquiring production lines is necessary to avoid "oversupply". In the past, Sandisk has had a number of quarters with less than 5% declines in ASP's. A graph of the declines usually looks like a downward trending step function. There are periods of huge ASP declines followed by nearly flat pricing. The flat portion of the graph doesnt seem to be happening after the drastic declines in the last two quarters of '04. I dont believe that there is a huge amount of supply coming online from Samsung/Sandisk during the 2nd quarter so it is hard to see the price cuts as being preemptive. Basically, in a nearly ideal environment, Sandisk is guiding for about a >20% ASP decline during the 1st half. The model that they provided during their last analyst day guided for average ASP declines of 35-45% annualy. I fully expect greater price declines late in '05 and into '06 as the 70nm and 300mm transitions take place....so the annual price declines are very likely to be substantially above 50%. Slacker