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

To: clix who wrote (28131)	4/29/2005 3:20:41 PM
From: Pam	Respond to of 60323

Hi Clix, If Sandisk has enough NAND to pick up Lexar's market share, and Samsung also keeps ramping up -- won't this add up to a glut? Don't know what controllers the other companies are using, but they seem to have decent market shares -- especially overseas. Sandisk will have enough supply soon, they do not have it yet. Well, Supply/Demand situation is always tricky. If the Demand suddenly slips one Q for whatever reason and if Supply/Demand were in balance the previous Q, we would have oversupply right away. Generally 1-2Q is not a problem, Demand will have to be lower than Supply for a few Q's before we have a glut. Things don't change overnight and small discrepancies are absorbed by price-cuts and rebates. Supply is more predictable than Demand anyways. Consumer can change mind for various reasons. I wonder, why those products do not sell in the US? Licensing issues? Re Lexar cash, I defer to your judgment, as always. But I am fascinated, as you know, by the sequel to a possible Lexar demise, and I cannot imagine why Samsung wouldn't be interested to take over and become vertically integrated here as well. But we've been over this at length. Well, I did answer this before but will answer it one more time. There are several reasons- This could make buyers of Nand chips from Samsung very uncomfortable. Samsung would have insider information of an oversupply in the making which will make buyers of flash from them nervous. If you remember the days when LU was part of AT&T, the sales of hardware to RBOCs (Regional Bell Operating Companies) was hard as RBOCs and AT&T were competitors. Once LU was spun-off they thrived, for a while at least, doing business with RBOCs. Also, Lexar doesn't have all types of controllers and this still does not avoid royalty payments to SD, MS, etc. consortiums. Also, as cards get larger in size the overall cost of controller is much smaller portion of the total cost of the card. Right now, Samsung has just days worth of inventory, I doubt they are interested in keeping 10 weeks of inventory for a few extra %ge points in profits. Finally, I had also read sometime back that Samsung was building their own controllers. -Pam