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

To: Sam who wrote (55091)	6/5/2013 2:49:48 PM
From: slacker711	Read Replies (1) \| Respond to of 60323

But--no one will be building a new fab for planar 2D NAND. Samsung started building one last September in China. Is this exclusively a 3D NAND fab? Also, how much difference does it make? The fab is coming on line in 2014 and regardless of whether it is 2D or 3D, it is going to add to supply. Slacker

To: Sam who wrote (55091)	6/5/2013 3:52:18 PM
From: Unwelcomeguest	Respond to of 60323

Sam said it better than I did, Art. I should have been more descriptive. I fully expect most, if not all, of the current NAND manufacturers to expand production somewhat in their existing facilities over the next 6-12 months. As the prices rise, the ROI calculations and payback periods for the expansion projects will become more and more attractive. The return on any investment to increase capacity will begin very shortly after the investment is made. In the project analysis world, it would be like instant gratification. But this will not be true for a new fab as described in the next paragraph. For a new fab that costs $5 to $7 billion dollars and two years of construction time, the expected ROI has got to be really strong. That initial investment is more or less made in current dollars while the payback is spread out over the following years starting after year 2 or 3 of the initial investment. It would take at least 6-8 years of highly profitable NAND production discounted to present value just to recoup the initial investment. Consider the wisdom of making that investment with the knowledge that several competitors claim to have a solution for the Next Big Thing, 3D. So far, there are several candidates for the correct architecture and each manufacturer thinks their solution is The One. Sandisk and Toshiba, so far, are just two more entrants in the 3D development race. There has been discussion about the prospects of making 3D NAND in the same fab as planar NAND, but since nobody knows what the new, winning architecture will be or what type of equipment will be needed to manufacture it, it is a bit of a leap of faith to presume a new NAND fab can be converted to make 3D when it's time. UWG