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

To: Art Bechhoefer who wrote (33414)	9/12/2006 12:15:00 PM
From: inaflash	Respond to of 60323

Which company, Samsung or SanDisk/Toshiba is now the low cost producer of flash memory? My impression is that Samsung is slightly ahead in terms of cost because of their ability to get more in a given space (i.e., 40 v. 60 nano), but the total cost for Samsung includes royalty payments to SanDisk for MLC. Someone please correct me if I'm wrong. They both are for the most part. Specific parts aren't all that comparable, and depend on what assumptions you make. Samsung isn't building 40nm yet and probably not for a long time. The cost of the royalty payments does handicap Samsung when they're making exactly the same part with the same cost structure, which is really never the case. The second issue in terms of profitability for SanDisk is its position in retail sales for a variety of products. SanDisk doesn't make only the flash chip and envelope but makes products for the retail market, which carry higher margins than one would expect from a manufacturer alone. While it appears that Samsung is slowly getting into retail, they certainly do not have the penetration that SanDisk has. It's not clear to me that the two companies are trying to converge their business models. Samsung is a big manufacturer with a small retail presence, while Sandisk is a big retailer with a small manufacturing presence. Samsung is a wide company focus while Sandisk has a narrow focus. The danger Samsung runs with getting too far into the retail business is canibalizing their own customers. I also am impressed by the recent SNDK announcement of a high capacity miniSD of 4 to 8 gb for storing large files, including video. Could this format be what Apple is looking for as it develops its video iPOD products? The existance of Sansa and competition in the MP3 world is a deterrent for Apple to go down this path. Also, removable chips is an extension of the "floppy" model versus Apple's kill the "floppy" in favor of the "network" model. Ipods have all been connected devices, and I don't see that changing anytime soon. It goes back to their "hub" concept for their computers.