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

To: slacker711 who wrote (28146)	5/10/2005 5:49:14 PM
From: slacker711	Read Replies (1) \| Respond to of 60323

Lexar's view of the current flash market.... Sandisk's price cuts on the low-end might be an attempt to attack the new NAND producers as well as cut their own inventory. biz.yahoo.com We expect supply to remain tight in at least the first half of 2005. Despite the general industry over-demand condition, we expect prices of flash memory components to decline further in the second quarter of 2005. Price reductions of flash memory from the first quarter of 2004 to the first quarter of 2005 on a cost per megabyte basis were approximately 60%. A number of companies, including Hynix, Infineon, Micron and ST Micro, have either entered the market in 2004 or have announced that they plan to do so in the first half of 2005. In addition, other companies, including Renesas, Samsung and Toshiba, have announced that they plan to expand their production of flash memory during 2005. If these companies successfully introduce new products and/or expand output of flash memory, it could create an over-supply situation in the second half of 2005, driving product prices down and lowering our cost of flash. However, most of the new flash supply is lower density chips that can only be used cost effectively to manufacture lower capacity cards. We expect that Samsung and Toshiba will dominate the market for high density flash chips for at least the next twelve months as new flash memory suppliers generally expect to begin their production with lower density products or do not bring significant supply of larger capacity flash to market over the period. Also, because of irregular component shipments from certain of our suppliers, we have had to carry a higher level of inventory as a buffer against delivery delays.