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

To: gcgc who wrote (35266)	2/15/2007 11:53:41 AM
From: Pam	Respond to of 60323

What you said is true, too. But, only a fool will allow himself to be bleeding to death, with or without market shares. There is a limit to what one wants to do. The law of nature will take over in the end. Now, it is close to that end. Well, no one is bleeding to death yet and these are very experienced players and quite capable of sustaining losses over several quarters and continue staying in business. Micron is probably suffering the most here but they have a strong partner and Hynix is financially stable thanks to those depreciated fabs and good play in NAND and DRAM over the last couple of years. I am ignoring STM here as I think they are irrelevant to nand industry analysis at this point. However, I do agree that every "market correction" starts with order cancellations or postponements for fab equipment or pushing-out fab construction and we are seeing some early signs of this. Having said that, there is still a lot more work to be done and the real test will come when we find out what can Sandisk command for their products in retail markets in March, April for 1GB cards and whether they can push unit densities to 2GB quickly? The retail prices are still holding well but that is because second-tier vendors paid much higher than $4.70/GB a couple of months ago! When we see products come out that were built using $4.75-5.00/GB nand, retail pricing will come down and it becomes very hard for Sandisk to have rev growth unless units grow rapidly and/or they can migrate customers to higher densities and sell them higher GBs but at much higher $s/units! PS: It may be a good idea to get rid of all cards 512MB and below at very nominal prices after rebates and have nothing below 1GB densities. If some people do not mail-in their rebates, they could get rid of everything that has been sitting at CCity's and BBuy's at fairly decent overall prices.